Please help, appear to be running into permission issues...

Win7
IIS7
SQL 2008 Express
DNN v5 (DotNetNuke_Community_05.01.02_Install)

Follow instructions for install on pages 22-30 and get the following...

When testing the connection during the "Add Website" step, I get this...

"The server is configured to use pass-through authentication with a built-in account to access the specified physical path. However, IIS Manager cannot verify whether the built-in account has access. Make sure that the application pool identity has Read access to the physical path. If this server is joined to a domain, and the application pool identity is NetworkService or LocalSystem, verify that <domain>\<computer_name>$ has Read access to the physical path. Then test these settings again."

When accessing the page for the Install Wizard, I get this...

Security Exception
Description: The application attempted to perform an operation not allowed by the security policy. To grant this application the required permission please contact your system administrator or change the application's trust level in the configuration file.

Exception Details: System.Security.SecurityException: Request for the permission of type 'System.Web.AspNetHostingPermission, System, Version=2.0.0.0, Culture=neutral, PublicKeyToken=b77a5c561934e089' failed.