SQL 6.5 and ASP.NET/IIS - SQL Server does not exist or access denied

Question

I am experiencing a problem using ASP.NET Web Services to access my SQL 6.5 database. I have found many posts on many forums with people experiencing a similar problem, but no one has provided a workable solution. Here is the synposis: I have a .Net assembly that makes a SQL call to my 6.5 db. When I call that assembly from a command line app on my local machine, it works perfectly. However, when I wrap that same assembly into my Web Services, I get the dreaded error "ConnectionOpen (Connect()).]SQL Server does not exist or access denied". I have narrowed this down to a permissions issue, but I'm unable to get any deeper than that. After doing a little packet-capturing, I am sure that contact is being made to the SQL server, but I do not believe it is making it as far as SQL authentication. I know that the ASP worker process runs under the user [localmachine]\ASPNET. I do not believe that this user account has addequate priviledges to access my server. However, since we run Active Directory, I have no way of adding that local (machine) user to any security group that would be allowed access. Is there a way I can change the ASP worker process user? Am I on the right track here? BTW, the SQL 6.5 server is setup for Standard Authentication. I have seen a couple posts that suggest switching to Mixed Mode may fix this issue, but since I'm using SQL authentication currently, that does not make any sense to me. This issue has baffled out entire IT department. Any advice would be greatly appreciated. -James Divine