I have solved this by adding read permission to folder for application pool user (WIN SERVER 2008 R2):C:\Windows\System32\inetsrv\config
A little background:Our server has been hacked using classical error where app user had more permissions that it should (local admin).
To fix it we created new domain user that had only permissions on application folder, with min needed rights and assigned it as application pool user. than we hit in the issue and this was solution to our problems.
