That is a catch-22. You cant rename a drive that already
is C, and you cant rename a drive
to C. I havent any idea how you might resolve it but it sure seems like this type of problem was encountered before and has a solution.
Just in case you havent Googled the topic, if you Google "rename drive to C" you will get a ton of links, some of which might be useful to you.
One of the resulting links is a link to the Microsoft site that apparently mentions what you are trying to do:
http://support.microsoft.com/kb/223188