Well the username and password must have been entered correctly since changing the account's membership to the local administrators group without any other change causes the application to work. Also the w3wp.exe can be seen running as that account. Thanks for asking these questions because redacting information from the event log caused me to see the error. We have encrypted sensitive section of the web.config and the user doesn't have the access required to decrypt.
The error displayed to the user is:
<!-- Web.Config Configuration File -->
<configuration>
<system.web>
<customErrors mode="Off"/>
</system.web>
</configuration>
And in the event log:
Event Type: Warning
Event Source: ASP.NET 2.0.50727.0
Event Category: Web Event
Event ID: 1310
Date: 29/10/2009
Time: 6:00:49 PM
User: N/A
Computer:
Description:
Event code: 3008
Event message: A configuration error has occurred.
Event time: 29/10/2009 6:00:49 PM
Event time (UTC): 29/10/2009 7:00:49 AM
Event ID: 3a031bbf65c9470989885e5b05096042
Event sequence: 1
Event occurrence: 1
Event detail code: 0
Application information:
Application domain: /LM/w3svc/2/ROOT-1-129012732357915783
Trust level: Full
Application Virtual Path: /
Application Path:
Machine name:
Process information:
Process ID: 2344
Process name: w3wp.exe
Account name:
Exception information:
Exception type: ConfigurationErrorsException
Exception message: Failed to decrypt using provider 'RsaProtectedConfigurationProvider'. Error message from the provider: The RSA key container could not be opened. ()