Do you have your site setup under the 'Default Web Site' site node or did you create a new site in IIS? If you created a new site, try going to the 'Default Web Site' and changing it's application pool from 'DefaulAppPool' to 'Asp.Net v4.0.' I know the 'Default Web Site' should have nothing to do with your site, but I've read that in some situations that helped resovle the issue. Also, in order to get your custom image handler working, try to use a configuration-free HTTP handler, with a .ashx file extention. This way you can get your image handler working (until you resolve this issue) without having to register it in IIS.
