Check #5 to make sure the AppPool the site is using is actually set to use the Identity you are adding NTFS permissions for.
Specify an Identity for an Application Pool (IIS 7)
- Open IIS Manager.
- In the Connections pane, expand the server node and click Application Pools.
- On the Application Pools page, select the application pool for which you want to specify an identity, and then click Advanced Settings in the Actions pane.
- For the Identity property, click the ... button to open the Application Pool Identity dialog box.
- If you want to use a built-in account, select the Built-in account option and select an account from the list.