Request for the permission failed from a desktop app running on a network drive

Question 1

Interestingly here's another (unanswered) SO from someone getting the same problem from CruiseControl: .Net 4 CAS - Request for the permission of type 'System.Net.WebPermission, System, Version=4.0.0.0, Action: Demand. It's possible that this'll end up being a dupe; but that's unfair at the moment since that's not been answered.

This seems similar to the pre 3.5 sp1 network security woes, where applications runs from a network location would be denied many permissions through CAS.

I think this blog post might provide the solution, although it might not apply if the executable itself is loaded from a remote location (check the first solution) http://www.damirscorner.com/CodeAccessSecurityStrikesBackInNET4.aspx

Although, also looking at Exploring the .Net Framework 4 Security Model (which provides the same workarounds as the aforementioned blog post) it might not apply, as it implies that unhosted Exes run from network locations should run fully-trusted by default - when clearly yours aren't!

One thing to try if this doesn't work is to make the exe (and by extension all it's references) strong-named.

Question 2

Having read Andras's answer and checked some other applications we provide to clients, it seems the following code in the app.config file could sort the issue (as it's present in our other applications but not the one we're having an issue with):

<configuration>
  <runtime>
    <loadFromRemoteSources enabled="true" />
  </runtime>
</configuration>