I am also running into EPERM error at startup. I’ve tried disabling Norton AV and Firewall (although under the firewall rules, the Local by Flywheel has complete program access) and Malwarebytes, but so far I am unable to connect to my localhost or site.
I’m on Windows 10, and on version 5.5.3+3667 of Local and came across this error when importing a new site. My hosts file was fine, my anti-virus was off, and still had the problem.
Since both of those things are related to permissions, my workaround was to run Local with Admin privileges and use the File > Import method instead of drag-n-drop import method. Worked smoothly then.