Server Application Unavailable 

Fix for: 'Server Application Unavailable 'Error after applying Security Update for IE'

Microsoft has identified an issue with the recent MS03-32 Security Update for Internet Explorer security patch and ASP.NET V1.0 running on Windows XP. This patch can be installed manually or by obtaining recent critical updates from the Windows Update site. The symptom of this issue is that after installing the patch on a Windows XP machine, all requests to ASP.NET applications running on the local IIS 5.1 web server result in an error message saying "Server Application Unavailable". Requests to remote web servers are unaffected.

For solution to above mentioned reason, check out the following link.

Fix for: 'Server Application Unavailable' Error after Applying Security Update for IE

Other Reasons

After you install Microsoft Visual Studio .NET or the Microsoft .NET Framework on a domain controller or on a backup domain controller, if you try to run an ASP.NET application, the browser displays the following error message:

Furthermore, the following event is logged in the system application event log:

Also, the EventLog shows aspnet wp.exe could not be launched because the username and/or password supplied in the processModel section of the config file are invalid. aspnet wp.exe could not be started. HRESULT for the failure: 80004005

Cause and Solution

By default, ASP.NET runs its worker process (Aspnet wp.exe) with a weak account (the ASPNET account) to ship with more secure defaults. However, if you run the ASPNET account on a domain controller, you cannot run the worker process as the ASPNET account. The domain controller requires an account that has administrative privileges to start the process correctly.

For more details, refer the following links