>Also, something that tripped me was that the permissions for IIS depend on the Network Service Account - try and give full access to that account to the applications folders and see what happens.
If you mean the ASP.NET account, I tried it and it didn't change anything. I also tried to put an administrative account in the ASP.NET Web site configuration and that doesn't change anything as well.
I never seen something so frustrating. This is a total waste of time. In Windows Server 2000, there isn't anything like that we have to do. We just run the Web site as is. With Windows Server 2003, it should have been the same as well or easier. This is one of the reason to move on not to complicate things.