So if you're running an ASP page that invokes a web service component - you may have to give permissions to the windows temp folder. Windows compiles and references a XML serialization dll (in windows temp folder).
Verify that the DACL specified at %WINDIR%\Temp contains an ACE for the
ASP.NET worker process. The ASP.NET worker process requires write
permissions in order to persist the dynamically-created assembly
(sqezqp4x.dll), which is generated upon receiving a request.
Note: the dll name will change each time, and you need to give permissions to the IWAM user on %WINDIR%\Temp (depending on the isolation level?). I also noticed that the DLL appears to be cached by the system, so you can remove the permissions - it still works - until you reboot.