ASP.NET Debugging - solved!
Ok, after trying a whack of different suggestions, I got it to work.
I think what did it was changing the settings in Internet Explorer --> Tools-->Internet Options-->Security-->Local Intranet --> Custom Level -->User Authentication-->Logon--> Use automatic logon in Intranet Zone only.
Running my web app with Ctrl-F5 to skip debugging worked ok, but IE put up an authentication dialog box. When running it with debugging, the W3CSVC log file showed the DEBUG request returning a 401 error (permission denied).
Mike