permissions problem createing a COM object in ASP.NET after upgrade to 2

[Robert Ginsburg]

I am upgrading an existing .NET 1.1 project to 2.0. (yes the project
continues to work perfectly in 1.1). The project includes a reference to an
assembly that manages communication to several databases and COM objects.
Since we need to be able to update the COM objects, the COM interop is hand
coded and is "late bound". That is so say, the progID is interograted to
create the object and the instances of the object are invoked by
InvokeMethod. (see snippet below). The Activator.CreateInstance always
throws a COM 80070005 error (which is an access denied). The DCOM
permissions are set so that everyone and anyone (including anonymous, guest,
IUSR... etc) has local permission on the COM object. A VBScript test running
from the console will work fine, the .NET 1.1 site works fine. I have tried
putting the assembly in the GAC and playing with the trust level of the web
site, but no matter what combination I use, I get the error.
Any help or thoughts on the matter are appreciated.

-robert
// in the constuctor ask for permissions and get our type from our PROGID
constant
SecurityPermission oSP = new
SecurityPermission(SecurityPermissionFlag.Unmanage dCode);
oSP.Demand();
m_TMType = Type.GetTypeFromProgID(PROGID); // this works and returns a
correct type

// in the method call

try {
object oTMObject = Activator.CreateInstance(m_TMType); // this always
throws an error
object [] oParms = new Object[4];
oParms[0] = UserName;
oParms[1] = Password;
oParms[2] = bResult;
oParms[3] = bPWIsExpired;

ParameterModifier oByRefFlag = new ParameterModifier(4);
oByRefFlag[0]=false;
oByRefFlag[1]=false;
oByRefFlag[2]=true;
oByRefFlag[3]=true;

ParameterModifier[] oPMods= {oByRefFlag};
bReturn = (bool)
m_TMType.InvokeMember("TestUserCredentials",Bindin gFlags.InvokeMethod,null,oTMObject,oParms,oPMods,
null,null);
if (bReturn) {
bReturn = (bool) oParms[2];
PWIsExpired = (bool) oParms[3];
}
oTMObject = null;

}
catch(Exception ERR) {
System.Diagnostics.Debug.Write(ERR.Message);
}
return bReturn;