I managed to solve the issue myself but still feel that the answer can be useful to others, therefore I am posting it here.
The problem was twofold. First, the Authentication was set to Anonymous authentication instead of Windows authentication. This still resulted in an Unexpected error 80, with the same code number 80004005. In term, this was solved by running the browser from which ASP site is accessed as "run as administrator".
For reasons still unknown, the domain user on the windows server did not have full rights automatically when running the browser even though it showed under domain group Administrators.
I hope this helps a few of you :)
