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ASP.NET: 401 (Unauthorized) error

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My distributed app has the following cofiguration:

My machine is not networked and I use localhost on IIS as a Web container.
On localhost I have an ASP.NET app hosting a remote object. My goal is to
test authenticating, then authorizing/denying users based on their Windows
accounts (format: Domain\User). So in the ASP.NET app Web.config I have:

<authentication mode="Windows" />

<identity impersonate="true" />

(and authorization is set to <allow users="*" /> by default - in

In the ASP.NET app's virtual folder in IIS I disable Anonymous Access and
check the Integrated Windows Authentication box.

For the physical folder of the ASP.NET app I give Full Control rights to the
user (myself=Admin rights) currently logged on the domain (the local

With this configuration I expect to be properly authorized by IIS and
ASP.NET in order to connect to the remote object. Instead I get a 401
(Unauthorized) runtime error.

I think I read somewhere that testing ASP.NET authentication and
authorization on the local domain doesn't work. Unfortunately, I do not have
a network domain available, so I wonder if this could be the reason for the
error. Or maybe I am missing something elsewhere?

Thanks for your suggestions.

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