It is one thing to have an error that is static. Another to have it mysteriously disappear. I did not change anything in IIS 7.5 while I attempted to narrow down the cause of an error.
When calling the website by \\localhost\te_beta it would error. However calling the redirected \\localhost\te_beta\index.htm works just fine. Calling the ASP page via \\localhost\te_beta\default.asp also seems to work. So then I tried \\localhost\te_beta again, but now the error is gone.
Very strange indeed!