System.DirectoryServices.DirectoryServicesCOMException

I keep getting the following error when trying to run an application in the production environment with "anonymous" authentication and hardcoded username.

When I turn on basic authentication, which then prompts for username/password everything works like a charm. but I need to get the hardcoded version to work as well. Can't figure out whats going on.

Everything works perfectly on another server.

Exception Details: System.DirectoryServices.DirectoryServicesCOMException: An operations error occurred.

Source Error:

An unhandled exception was generated during the execution of the current web request. Information regarding the origin and location of the exception can be identified using the exception stack trace below.

Stack Trace:

[DirectoryServicesCOMException (0x80072020): An operations error occurred.]
System.DirectoryServices.DirectoryEntry.Bind(Boolean throwIfFail) +781
System.DirectoryServices.DirectoryEntry.Bind() +44
System.DirectoryServices.DirectoryEntry.get_SchemaEntry() +49
System.DirectoryServices.AccountManagement.ADStoreCtx.IsContainer(DirectoryEntry de) +62
System.DirectoryServices.AccountManagement.ADStoreCtx..ctor(DirectoryEntry ctxBase, Boolean ownCtxBase, String username, String password, ContextOptions options) +123
System.DirectoryServices.AccountManagement.PrincipalContext.CreateContextFromDirectoryEntry(DirectoryEntry entry) +234
System.DirectoryServices.AccountManagement.PrincipalContext.DoLDAPDirectoryInit() +497

[PrincipalOperationException: An operations error occurred.]
System.DirectoryServices.AccountManagement.PrincipalContext.DoLDAPDirectoryInit() +534256
System.DirectoryServices.AccountManagement.PrincipalContext.DoDomainInit() +61
System.DirectoryServices.AccountManagement.PrincipalContext.Initialize() +141
System.DirectoryServices.AccountManagement.PrincipalContext.get_QueryCtx() +42
System.DirectoryServices.AccountManagement.Principal.FindByIdentityWithTypeHelper(PrincipalContext context, Type principalType, Nullable`1 identityType, String identityValue, DateTime refDate) +27
System.DirectoryServices.AccountManagement.GroupPrincipal.FindByIdentity(PrincipalContext context, String identityValue) +95
SERT_BO.ADHelper.UserBelongsToGrp(String adGroup, String sAMAccountName, String& emailAddr, String& fullName) in D:\SERT\BusinessObjects\SERT_BO\ADHelper.cs:199
SERT_BO.UserSession.GetUserSession(String userName) in D:\SERT\BusinessObjects\SERT_BO\UserSession.cs:44
SERT.SetUserSession.Page_Load(Object sender, EventArgs e) in D:\SERT\SERT\SERT\SetUserSession.aspx.cs:23
System.Web.Util.CalliHelper.EventArgFunctionCaller(IntPtr fp, Object o, Object t, EventArgs e) +25
System.Web.UI.Control.LoadRecursive() +71
System.Web.UI.Page.ProcessRequestMain(Boolean includeStagesBeforeAsyncPoint, Boolean includeStagesAfterAsyncPoint) +3064

One thing to check is that the AppPool in which the ASP.NET app is running has the right privileges. As a quick test you can set the identity of the AppPool to Local System and see if this solves the issue. If the problem is here, then you can set the application pool identity to a (domain?) user that has enough privileges on this server.