HTTP Error 500.19 - Internal Server Error 0x8007052e

I copied an MVC project from another development pc to my laptop and tried to deploy it on the laptop which gave this error. The user account password was changed recently prior to this error. I tried tinkering around with the app pool permissions for the root folders with no effect. Any ideas? I am stuck.

HTTP Error 500.19 - Internal Server Error
The requested page cannot be accessed because the related configuration data for the page is invalid.

Detailed Error Information

Module IIS Web Core
Notification Unknown
Handler Not yet determined
Error Code 0x8007052e
Config Error Can not log on locally to C:\inetpub\wwwroot as user {MY ACCOUNT} with virtual directory password
Config File \?\C:\inetpub\temp\apppools\ASP.NET v4.0\ASP.NET v4.0.config
Requested URL http://localhost:80/hts
Physical Path
Logon Method Not yet determined
Logon User Not yet determined

Config Source

145: <application path="/" applicationPool="ASP.NET v4.0">
146:  <virtualDirectory path="/" physicalPath="%SystemDrive%\inetpub\wwwroot" userName="{MY ACCOUNT}" password="[enc:AesProvider:{etc etc etc}:enc]" />
147: </application>

1. Open the Internet Information Services (IIS) Manager (Start > Run > type "inetmgr").
2. Using the navigation pane on the left, browse to Sites > Default Web Site.
3. Right-click on Default Web Site and select Manage Web Site > Advanced Settings.
4. Set the Physical Path Credentials field to Application user (you must enter user and password).
5. Click OK and then OK again.
6. Right-click on Default Web Site and select Manage Web Site > Restart to refresh the changes that were just made.
7. At this point you should be able to reload the page in your browser.