I have an asp.net web app which works fine in Windows XP machine in a domain. I am porting it to a Windows 7 stand alone machine. The app uses a web service which makes a call to sql server. The web server (IIS 7.5) and SQL Server are on the same stand alone machine.

I enabled Windows authentication for the website and web service. The web service uses a trusted connection connection string. The web service credentials uses System.Net.CredentialCache.DefaultCredentials. I noticed username, password and domainname are blank after the call! The webservice and web site use the 'Classic .NET AppPool' with NetworkServices identity.

I am getting an exception "NT AUTHORITY\ANONYMOUS LOGON" in the database call in the web service. I am assuming it's related to the blank credentials.

I am expecting ASPNET user to be the security token to the database. Why is this not happening? Did I miss a setting? (Usually this happens when sql server and web server are on two different machines in a domain, delegation & double hopping, but in my case everything is on a dev box)