Guys,
Thanks for you help. I tried to investigate this more and started looking at the IIS metabase settings and there were two settings which got corrupted. One is the LogType setting (parent node) and the other one is the DontLog setting (on the child node). Both were set to 0 and true respectively which was causing the issue. The weird thing was IISManager wasn't showing that and it lead me to believe that the settings did apply, but they weren't for some reason.
Thanks once again guys. I appreciate your help.