windows server 2008 - Win2008/IIS7/fx2.0 - 500.19 error

I installed new boxes at the beginning of the week.
1) Web Server on Win2008 x64, IIS 7 + all updates
2) DB Server on Win2008 x64, SQL 2008 Ent + all updates

I configured my websites, set up host headers and DNS entries, worked through some problems on my handlers and finally got it all running Wednesday morning. Our team has been using it since then. This morning I came in and everyone of us is getting a 500 error.

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Error Summary
HTTP Error 500.19 - Internal Server Error
The requested page cannot be accessed because the related configuration data for the page is invalid.
Detailed Error Information
Module IIS Web Core
Notification Unknown
Handler Not yet determined
Error Code 0x80070005
Config Error Cannot read configuration file due to insufficient permissions
Config File \?\C:\RivWorks\dev\web.config

Requested URL http://dev.rivworks.com:80/login.aspx

Physical Path
Logon Method Not yet determined
Logon User Not yet determined
Config Source
-1:
0:
Links and More InformationThis error occurs when there is a problem reading the configuration file for the Web server or Web application. In some cases, the event logs may contain more information about what caused this error.

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I’ve gone through the KB articles, made sure IIS_IUSRS had read permissions and am now stumped. What bothers me is IIS is looking in \?\C:\ instead of just C:. What is happening?

TIA

NOTE:
I've gone through and reconfigured everything on my web site. AppPool is using NetworkServices. NetworkServices has been granted R/W permissions on all directories at the web root on down. I've restarted my web site as well as issuing an IISRESET. I am now getting a 401.3 error when I go to the URL with no page (http://dev.rivworks.com/). If I put a page in there - including what is already listed as the default page in IIS settings (http://dev.rivworks.com/default.aspx) - it works but CSS does not render. This is true wether I am directly on the server or on any client machine within our network. I am seriously stumped at the moment.

Answer

What changed since the beginning of the week? Does your team consist of programmers actively developing the site you are hosting?

Did you grant IUSRS read permission or was it already there? Did you restart IIS after adding if so?

You could try running the Process Monitor tool, reproduce the error and look for “Access Denied” in the “Result” column. You can then configure the required permissions accordingly.

Does the application pool's user also have read access to C:\RivWorks\dev? You might want to replace the permissions on all child objects within RivWorks\dev after verifying (Folder properties, Security Tab, Advanced)