After a couple months of on and off tweaking of my system and general grunting, moaning, and bitching, I finally figured out why ASP.NET sites stopped running on my dev workstation. It was a problem with an updated version of ZoneAlarm.
Basically you can either wait for a fix or you can completely uninstall the new version, and re-install version 4.5. See this message in their message board for more info: http://forum.zonelabs.org/zonelabs/board/message?board.id=access&message.id=10968
I really don't use my workstation for running much - I have a dedicated development web server with sql server and all installed. But occasionally I will install little test pages and such on my workstation rather than the web server. A couple of months ago I was going through a tutorial on using built-in Crystal Reports in .NET and I decided to give it a run on my workstation since VS.NET and all was already installed there and it would be easy to get up and running quickly - or so I thought. I ran into a problem creating the new application (virtual directory) and after poking around I realized that none of the ASP.NET stuff I had installed there was working at all - the browser would just hang. I checked some of the ASP applications and some of the lighter stuff worked okay, but some of the heavier stuff seemed to just hang, too - sometimes they would eventually display something, though.
I performed search after search on the internet and did everything from re-register the asp.net isapi dlls to give the asp.net account full control over the entire Microsoft .NET folder. Nothing worked. I thought that at one time I had shutdown ZoneAlarm and tried to run the sites with no luck, but maybe I am mistaken.
Yesterday I decided I was going to do whatever it takes to get everything working again, but before re-installing IIS and the .NET Framework I did one more google search. I finally found reference to the problem on the ZoneLabs discussion board. Whew, that saved me some work. I did have to uninstall ZoneAlarm and reinstall the older version, but everything seems to be functioning well now.