Security issue or not on windows 2003 server.

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I have a web service, which in turn uses a dll that is installed on the
same server. The dll is deployed to the GAC. One of the purposes of the dll
is to create a file, then write some information to the file. The file
location is not in web directory.
This works when it run the web service on windows 2000 server, but does
not work on a windows 2003 server. My suspicion is that this is a
security/privilege issue. The web service is not using impersonation. The
method that uses the dll does run everything else it is supposed to do,
which in this case is call a stored procedure and return some data, just not
the part using the dll to create and write data to a file.
I have tried to change the permissions on the folder where the file will
be created to allow full control for the aspnet user, and the domain user
that the web sites run under. I tried sharing the folder as well. Neither of
these seem to work. When I set up a security audit for the folder, I did not
see any access, either success or failure, for either of the two users.
I have not tried writing the file to folder inside the web site or using
impersonation yet.
So, a couple of questions, what user is the web service running under?
And are there any suggestions on how to go about getting this to work?

Thanks,
J