Web App works on localhost but fails on remote connection

We have a new ASP.NET web application we are deploying that uses a separate DLL which we also built which in turn interrogates the Active Directory for simple user and group membership information. The server is Windows Server 2003.

The application works fine if I RDP to the server and browse it under localhost.

The application throws the following error when I browse to it from a separate PC. It also throws the same error if I browse to it from the RDP session on the server, but browse it under the server name.

Is this a code-access security issue? Other ideas?

Exception Details: System.Runtime.InteropServices.COMException: 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: [COMException (0x80072020): An operations error occurred. ]

   System.DirectoryServices.DirectoryEntry.Bind(Boolean throwIfFail) +420085
   System.DirectoryServices.DirectoryEntry.Bind() +36
   System.DirectoryServices.DirectoryEntry.get_Name() +32
   USM.UsmAD.get_DomainName() in C:\DevWork\Repo_CP\UnifiedSecurity\BRANCHES\LoginVsGUID\Applications\Active Directory Search\USMAD\USMAD\UsmAD.cs:60
   USM.UsmAD.Get_UserGroupNames(String username) in C:\DevWork\Repo_CP\UnifiedSecurity\BRANCHES\LoginVsGUID\Applications\Active Directory Search\USMAD\USMAD\UsmAD.cs:190
   AdminWeb.CheckAccessDAL.GetGroupNames() in C:\DevWork\Repo_CP\UnifiedSecurity\BRANCHES\LoginVsGUID\Applications\AdminWeb\USMDAL\CheckAccessDAL.cs:28
   AdminWeb.CheckAccessDAL.SetMenuAccess(Menu mnuUSMAdmin) in C:\DevWork\Repo_CP\UnifiedSecurity\BRANCHES\LoginVsGUID\Applications\AdminWeb\USMDAL\CheckAccessDAL.cs:89
   AdminWeb.SiteMaster.TrimMainMenus() in C:\DevWork\Repo_CP\UnifiedSecurity\BRANCHES\LoginVsGUID\Applications\AdminWeb\AdminWeb\Site.Master.cs:50
   AdminWeb.SiteMaster.Page_Load(Object sender, EventArgs e) in C:\DevWork\Repo_CP\UnifiedSecurity\BRANCHES\LoginVsGUID\Applications\AdminWeb\AdminWeb\Site.Master.cs:17
   System.Web.Util.CalliHelper.EventArgFunctionCaller(IntPtr fp, Object o, Object t, EventArgs e) +14
   System.Web.Util.CalliEventHandlerDelegateProxy.Callback(Object sender, EventArgs e) +35
   System.Web.UI.Control.OnLoad(EventArgs e) +91
   System.Web.UI.Control.LoadRecursive() +74
   System.Web.UI.Control.LoadRecursive() +146
   System.Web.UI.Page.ProcessRequestMain(Boolean includeStagesBeforeAsyncPoint, Boolean includeStagesAfterAsyncPoint) +2207

You will probably need to run your app pool under an domain level identity that has permission to access the resources it needs to talk to Active Directory.

Specify an Identity for an Application Pool (IIS 7)

Configuring Application Pool Identity with IIS 6.0 (IIS 6.0)

Here is an article if you need to do this at runtime:

How To: Use Impersonation and Delegation in ASP.NET 2.0

I also encourage you to implement an UnhandledException handler to log these run-time errors.