Error (0x80070542) in website using custom account in application pool

My ASP.NET MVC 3 website was working fine, and then this afternoon I started getting a 500 error, although the only thing I changed was to enable 32-bit applications. I changed that back but the error remains. I've even deleted my app pool and web site and recreated them in IIS with no luck.

If I revert the app pool back to AppPoolIdentity I do not get this error (but I cannot access my database then, I need that custom account to read my database with integrated security).

Can anyone point me in the right direction?

ModuleName IIS Web Core 
Notification 2 
HttpStatus 500 
HttpReason Internal Server Error 
HttpSubStatus 0 
ErrorCode 2147943746 
ConfigExceptionInfo  
Notification AUTHENTICATE_REQUEST 
ErrorCode Either a required impersonation level was not provided, or the provided impersonation level is invalid. (0x80070542) 

UPDATE:

I enabled impersonation and impersonated a user with admin access to the machine. I received this error in response, which does not tell me much more:

Could not load file or assembly 'Microsoft.CSharp, Version=4.0.0.0, Culture=neutral, PublicKeyToken=b03f5f7f11d50a3a' or one of its dependencies. Either a required impersonation level was not provided, or the provided impersonation level is invalid. (Exception from HRESULT: 0x80070542) 

Well, a full uninstall and reinstall of IIS managed to do the trick for me.

I had to follow the instructions here: http://forums.iis.net/t/1170286.aspx in order to do it properly.