iis does not show images HTTP Error 500.0 - Error Code 0x800703e9

I developed a simple MVC website using the vs2012 framework 4. When running on local machine everything works fine.

When passing to the final server (windows server 2008 r2) it does not show any images. Even when I type the full path: http://localhost:83/images/logo.png I get the error:

HTTP Error 500.0 - Internal Server Error

Module: ManagedPipelineHandler

Notification: ExecuteRequestHandler

Handler: ExtensionlessUrlHandler-Integrated-4.0

Error Code: 0x800703e9

Requested URL: http://localhost:83/images/logo.png

Physical Path: C:\inetpub\wwwroot\Portal\Images\logo.png (the path is correct)

Logon Method: Anonymous

Logon User: Anonymous

This is what I have tried: Full permissions to everyone on the wwwroot folder - didn't do anything. I tried updating the framework - it was updated. Turn windows features on or off > Static Content - it was already checked. Checked img/css paths and they are correct. Checked the correct MIME type for .css, .png and .js all were correct.

web.config:

 <location path="Images">
    <system.web>
      <authorization>
        <allow users="*" />
      </authorization>
    </system.web>
  </location>

I have tried everything that I could find on Stack overflows site.

Any suggestions?