Problem with new iis site with permissions

Greetings.  I have a new installation of win2k8 I am attempting to setup.  It is running IIS 7.

The machine is not a member of a domain.

I created a new site (and application pool).  The path I am using is not the inetpub folder but rather c:\IISWebsites\NewWebsite.

I am having 2 problems, first when navigating to the address (which is configured within the site as the name).  First, the site is giving me the following error:

403 - Forbidden: Access is denied.
You do not have permission to view this directory or page using the credentials that you supplied.

Second, the when using the "test connection" accessed by right clicking on the site and selecting basic settings authentication appears to be ok, i get the following message:
The application pool identity is valid.

But the authorization gives me a warning:
The server is configured to use pass-through authentication with a built-in account to access the specified physical path. However, IIS Manager cannot verify whether the built-in account has access. Make sure that the application pool identity has Read access to the physical path. If this server is joined to a domain, and the application pool identity is NetworkService or LocalSystem, verify that <domain>\<computer_name>$ has Read access to the physical path. Then test these settings again.

Any thoughts would be appreciated.

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check the permissions on 'c:\IISWebsites\NewWebsite' - compare it to the wwwroot default web site folder/s.

In conjunction with meverest above the iusr_machinename , ASPNET and IIS_WPG users need Read permission at the minimum IUSR_machinename for HTML pages.
rugby148Author Commented:
All of the permissions matched perfectly.  I ended up resolving the issue by re-installing windows server.  Recreated the sites and all was well.  Thanks for the help.
The most dependable methods to fixing Microsoft problems:
        1. Reboot
        2. Re-install

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rugby148Author Commented:
yeah.  unfortunately that is a true statement.
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