In IIS 7 on Windows Server 2008, application pools can be run as the “ApplicationPoolIdentity” account instead of the NetworkService account.
To resolve this issue, we will need to assign the ApplicationPoolIdentity permission to IIS temporary Compressed Files directory.
You can add the app pool identity from the command prompt with something like icacls.
icacls e:\inetpub\wwwroot\Temp /grant “IIS APPPOOL\DefaultAppPool”:(OI)(CI)(RX)