For some weird reason, at one time, I had a Final Fantasy VII folder not only in the C:/Program Files/Squaresoft/ folder, but in the C:/Program Files/ folder too. So I had two kernel.bin in two different places. Of course, my FFVII only loads data from the C:/Program Files/Squaresoft/ directory, so changing the other one didn't do a thing. Maybe you have the same issue ? IE, your game was installed in two different places and your game loads another kernel ?...
Try a right click on your FF7.exe shortcut (the icon you use to launch the game), and select Properties. Then, check the target's directory.
Also, AFAIK, Wall Market should be able to remove the Read-Only flag, but check in Kernel.bin's properties that the box really is unchecked.