Source: DCOM
Error: DCOM got error "Logon Failure: unknown username or bad password" Unable to logon .\IWAM_SERVERNAME in order to run the server.
Source: W3SVC
Error: "The server failed to load application '/LM/W3SVC/1/Root/op.' The error was 'The server process could not be started because the configured identity is incorrect. Check the username and password.
I did some basic test pages ( both aspx and asp ) and found out that both the pages were not serving from the server. (html pages were ok).
After some research (read Googling:) this is what I found out,
"Configured Identity Is Incorrect for IWAM Account!!"
and what you need to resolve this issue is to sync up IUSR and IWAM accounts in IIS metabase. I followed the steps in this MS KB article and the issue was resolved.
http://support.microsoft.com/default.aspx?scid=kb;%5BLN%5D;Q297989