Moving from .NET 2.0 to .NET 3.5 on Plesk - welcome to Server Application Unavailable errors

I just uploaded a new version of DinnerTimer.com which moved from being a .net 2.0 site to a .net 3.5 site, the server has .net 3.5 installed and every thing went well until I navigated to DinnerTimer.com

I was greeted by :

Server Application Unavailable
The web application you are attempting to access on this web server is currently unavailable.  Please hit the "Refresh" button in your web browser to retry your request.
Administrator Note: An error message detailing the cause of this specific request failure can be found in the application event log of the web server. Please review this log entry to discover what caused this error to occur.

The error message in the event log was :

Exception: System.IO.FileLoadException

Message: Could not load file or assembly 'System.Web, Version=2.0.0.0, Culture=neutral, PublicKeyToken=b03f5f7f11d50a3a' or one of its dependencies. Access is denied.

This struck me as a little crazy as all my other sites on the server are .NET 2.0 and the previous site was .NET 2.0.

After much searching on the net and trying a variety of things (including giving permission to the various IIS accounts to .net 3/3.5 folders in windows folder and setting up a dedicated 3.5 App pool for the site) I finally added IIS_WPG permissions on the "Web Sites" folder in IIS manager and the site magically appeared. Now I just have to wonder what the security implications are and if that broke any other sites.

You have to love simple upgrades! I'm not sure if this is a general issue with IIS or because I'm running plesk which uses different security & user settings to a normal IIS setup.