Using InstallShield 2012 Professional to install a ASP.NET website, and a custom app pool running in securitry context of a network service account. When I test the website, I
Notes:.
when considering settings in the "General Information" area, specifically the "Locked-Down Permissions" property - the behavior of file level permissions settings in InstallShield will differ. When selecting "Traditional Windows Installer handling", I was never successful adding explicit permissions. I noticed when doing so, all inherited permissions on the folder would dissappear. Additionally, while it appears the permissions are set in Windows, they behave like they are not set. Manual manipulation tests would show they were not correctly set.
When setting the "Locked-Down Permissions" property to "Custom InstallShield handling", I was able to add a permission and all inherited permissions remained intact. With this, I was able to apply the desired permissions to the root installation directory in the "Application Data"->"Files and Folders" area, and because I elected "Custom InstallShield handling" I am able to select the check box "Apply these permissions to child objects" in the advanced area of the permissions area of a folder property.
Steps to finalize and fix my problem:
In InstallShield (ISM file)...
Recompile installation program and install. Now works.