I have the same exact problem. But what is strange is that it used to work before. It doesn't after I reinstalled my system. Can it be because of the version 1.1?
Anyway, I researched the web and it looks like the solving might be that instead of using Context.User = newPrincipal, you can use:
Thread.CurrentPrincipal = newPrincipal
I didn't try this, but I will when I get home...
Please let me know if you find any other solution too...