I have or had 2 other post in other forums here that overall deal with the same thing.. but after the other suggestions im here since it seems to be due to authentication or authorization issues..
http://forums.asp.net/t/1663244.aspx/1?Custom+http+handler+for+dat+files+having+authentication+issues
http://forums.asp.net/t/1656796.aspx/1?What+account+to+grant+access+to+folders+outside+inetpub+
In my web.config i have the following setup for the forms authentication:
<authentication mode="Forms">
<forms name="form4" path="/" timeout="120" slidingExpiration="true" />
</authentication>
<authorization>
<deny users="?" />
</authorization>
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