IIS 7 Cannot Create ASPNETDB.MDF - asp.net-mvc-3

Question

I have a web application that uses a local SQL Server Express database (a.k.a. ~/App_Data/ASPNETDB.MDF).
When I deploy to IIS 7.0 on Windows 2008 Standard (SP2), I get the error:
A network-related or instance-specific error occurred while
establishing a connection to SQL Server. The server was not found or
was not accessible. Verify that the instance name is correct and that
SQL Server is configured to allow remote connections. (provider: SQL
Network Interfaces, error: 26 - Error Locating Server/Instance
Specified)
The error message goes on to offer some advice
SQLExpress database file auto-creation error:
The connection string specifies a local Sql Server Express instance
using a database location within the application's App_Data directory.
The provider attempted to automatically create the application
services database because the provider determined that the database
does not exist. The following configuration requirements are necessary
to successfully check for existence of the application services
database and automatically create the application services database:
If the application is running on either Windows 7 or Windows Server
2008R2, special configuration steps are necessary to enable
automatic creation of the provider database. Additional information
is available at: http://go.microsoft.com/fwlink/?LinkId=160102. If
the application's App_Data directory does not already exist, the web
server account must have read and write access to the application's
directory. This is necessary because the web server account will
automatically create the App_Data directory if it does not already
exist.
If the application's App_Data directory already exists, the web
server account only requires read and write access to the
application's App_Data directory. This is necessary because the web
server account will attempt to verify that the Sql Server Express
database already exists within the application's App_Data directory.
Revoking read access on the App_Data directory from the web server
account will prevent the provider from correctly determining if the
Sql Server Express database already exists. This will cause an error
when the provider attempts to create a duplicate of an already
existing database. Write access is required because the web server
account's credentials are used when creating the new database.
Sql Server Express must be installed on the machine.
The process identity for the web server account must have a local user profile. See the readme document for details on how to create a
local user profile for both machine and domain accounts.
I don't understand how to troubleshoot 4. (where can I find the "readme document"?). However, the other items look correct to me.
Specifically...
The app pool in question is running as NETWORK SERVICE (not Application Pool Identity)
The user NETWORK SERVICE has Full Control of App_Data (do I understand correctly that it does NOT need Read/Write for App_Data's parent, since App_Data is already created?)
Interestingly, if I copy ASPNETDB.MDF and ASPNETDB.LDF from my development machine to the production App_Data, the error changes:
A network-related or instance-specific error occurred while
establishing a connection to SQL Server. The server was not found or
was not accessible. Verify that the instance name is correct and that
SQL Server is configured to allow remote connections. (provider: SQL
Network Interfaces, error: 26 - Error Locating Server/Instance
Specified) Description: An unhandled exception occurred during the
execution of the current web request. Please review the stack trace
for more information about the error and where it originated in the
code.
Exception Details: System.Data.SqlClient.SqlException: A
network-related or instance-specific error occurred while establishing
a connection to SQL Server. The server was not found or was not
accessible. Verify that the instance name is correct and that SQL
Server is configured to allow remote connections. (provider: SQL
Network Interfaces, error: 26 - Error Locating Server/Instance
Specified)
What am I missing?

Answer 1

I had the same error before and the problem was that my SQL Server service was stopped, this is pretty weird but sometimes they just crash,I had to reinstall SQL Server cause the service didn't even alloud me to start it,so you may want to check this.

Answer 2

I ended up moving the relevant tables to a new SQL Server database because I could not resolve the permissions issue.
That is the recommended approach anyhow for a production application, though it seems unfortunate that it was so hard (in terms of determining how to configure security) to deploy the ASPNETDB.MDF variant for a very low-volume website.