OS 10.5 - Problem with shared hard drive - read only

We have two identical iMacs that are sharing a hard drive. The hard drive is conected to iMac#1 via USB and it is shared to iMac#2 using SMB. Problem is whenever iMac#2 opens a file on the drive, it would always be read only so we can never save the file unless we do a save as... change the file name and save it on the same shared drive. But once the file is saved to a different filename when we open it again, it would become read only as well.

The iMac#1 has no issue with this because the hard disk is connected to it so it must be a permission problem. The user on iMac#2 uses an administrator of iMac#1 to login to the shared hard disk. Then on the permissions read&write access has been provided for the administrator account. Am I missing something here, can someone please help me regarding this problem?

Shaun