I created an ASP.net MVC developed web application and I am trying to set up IIS.

The Error: Http error 500.19, error code 0x80070005, Cannot read configuration file due to insufficient permissions, config file: C:\inetpub\wwwroot\BudgetManagerMain\BudgetManager\web.config

If I set the AppPool to use 'administrator' i have no problems and can access the site just fine. If i set to NETWORK SERVICE (or anything else including self-created admin or non-admin user accounts), i get the above error.

Things I have tried:

1. identity for Application pool named 'test' is 'NetworkService'
2. Set full access privs for wwwroot and all children files/folders
3. verified effective permissions and NETWORK SERVICE has full access.
4. Authentication on my site is set for anonymous and running under Application Pool Identity
5. I do not have any physical path credentials set on the website
6. confirmed website is set to run under the application pool named 'test'

using Process Monitor, here is a summary of what i found on the ACCESS DENIED event

EVENT TAB:

1. Class: File System
2. Operation: CreateFile
3. Result: Access Denied
4. Path: ..\web.config

1. Desired Access: Generic Read
2. Disposition: Open
3. Options: Sybnchronous IO Non-Alert, Non-Directory file
4. Attributes: N
5. ShareMode: Read
6. AllocaitonSize: n/a

PROCESS TAB

...lots of stuff that seems irrelevant

User: NT AUTHORITY\NETWORK SERVICE