It sounds like you're running into a Kerberos double-hop issue. Just use
search that term and you'll get a lot of information that will help.
> Hello, I am running Windows Server 2008 and I get this Error when I
> test the connection (under Basic Settings)
> 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.
>
> Now the site works fine, except some URL when navigated to throw an
> Internal Server 500 Error. However, when I use the IE that is on
> Windows Server I can navigate to the Url and everything works so
> obviously it is a Permission Error. I spent 3 days on the problem
> trying every possible permission to the accounts and nothing works. It
> is a public website and not an intranet. Anyone know how to fix it or
> if there is a guide.
>
>
>
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