I have an ASP.NET MVC 3 Beta application running on IIS. In my web.config I defined following section responsible for forms authentication:
web.config
<
I think the server has trouble deciding what ~ means in this case, try giving a more direct url to the login page, such as /Account/LogOn.
Maybe you'll find something useful here http://msdn.microsoft.com/en-us/library/xdt4thhy.aspx