This problem might be solved because the question is old, but anyway.
Try manual login with username and password, then reapply the identity on the application pool, answer yes to apply user rights if questioned, restart the application pool and check the eventlog for errors.
Make sure the useraccount has the appropriate user rights , there will be complaints in the eventlog otherwise. Also make sure allow login to on the user account has the server entered or allow any.
Thanks
Andreas