>>Use Fiddler. That should tell you if
>>(a) the load request is made to the server
>>(b) whether it is found and downloaded
>
>I think this is related to the fact that in the new virtual environment, the Web site does not run in "A directory located on this computer". It uses "A share located on another computer". That is the only way I was able to make the site work. I also had to define the Connect As with the proper account so it would work. Well, all work except that part. There is something sensitive about the WebResource.axd file. I do not know if this could be related to this type of environment.

Did you try Fiddler to determine whether (a) or (b) above applies ?
Did you check the IIS event log ?
Is the .axd extension registered on the server ?