OK...Found the issue: This is good information for anyone else that may run into this. The account that is used for the AppPool in IIS needs to have "Logon as a Batch Job" rights. Just making the user a local admin or domain admin does not give the user the rights. Our environment for some reason had a GPO that restricted the users that could have the "Logon as a Batch Job" right. Once I edited the AD GPO by giving my AppPool user identity the right to "Logon as a Batch Job", the web client worked without any issues.
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