EXPERT RESPONSE
I would try to confirm it is in fact a permisisons issue by going to the IIS settings for the virtual site and deactivating Anonymous access. Enable either Integrated Windows access or Basic auth. Next, go to the website as usual. You will be prompted to login with an HTTP/1.0 old-style login popup. Use any account that you know has read/write permisisons to the directory where the site files are stored.
If everything works fine, then it is definitely an authentication issue. Now, go back to anonymous access and start adding permissions to the IUSR_SERVER account to see if you can get the application to write properly. I would also suggest (if possible) downloading the excellent FileMon tool from SysInternals and see which read/write accesses are being denied. That will help you hunt down the issue.
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