Sounds to me your aspnet_wp process has some issues, but I find it weird that the other app folder is running ok.
Do you run these two apps under the same identity (any custom identity settings in web.config that might curly it up)?

>Hi everyone.
>
>I am having problems trying to run my pages. I am having this message:
>
>
>Server Application Unavailable
>The web application you are attempting to access on this web server is currently unavailable. Please hit the "Refresh" button in your web browser to retry your request.
>
>
>It just happened yesterday. It was ok before I posted new changes. I have two virtual folders in this server (production), the other virtual folder is ok. This server is running W2K. It works fine in laptop (XP) and also I tried in another xp is OK.
>
>Any help would be appreciated.
>
>Thanks.