While I technically agree that the issue is with the server, it could be that the issue only manifests from the behaviour of particular users. To have a good chance at solving the problem you need to be able to consistently reproduce the issue which means understanding the user/client behaviour.

When the problem starts to occur does anyone who tries to create a new session have issues where those that are still logged in do not?

Do you do any page redirection within your code while creating new sessions (which could result in the error misreporting the location of the error).

Can you confirm that the line below you have listed is what is actually causing the problem by wrapping it in reponse.writes both before and after that line.

What happens if you try to set a different session value?

When the problem occurs, some users on other PC's can still work, and others cannot.
No while creating the session variable there is no page redirection, later on some other pages yes but the page in question no.
What I posted is the exact error that is coming up.
Regardless of what the session variable is it gives the same error.

Good day,

Some additional information I have now picked up after making a small change to the system.

The system now prompts the user for his network username and password, it is an intranet page after all.

When the error occurs it occurs with people who are not members of the administrator group on the network, but this seems to happen after the system has been idle for some time, generally during night shift. Should an administrator login to the site the site works for the administrator and then also works for all those non administrators that it was not working for. Does that help anyone perhaps pin point my problem? Seems something to do with permissions but where I do not know. I have added Everyone to the Inetpub folder permissions with FULL ACCESS to test to see if that was the problem but that also doesn't seem to have help.

Okie, based on this information I would guess the following...

You are creating an object in your application on start event. You could be creating it in the session on start and storing it in the application space though.

The permissions used to create the object are based on the user that is connected to the system at the time. If a user comes in without the necessary permissions then the creation of the object fails.

If a user has the necessary permissions the object creation succeeds.

Once the object is created it is used across the entire application so the users that do not have the permission to create the object can work properly.

Overnight there will be something happening to release drop the application, this is normanly an IIS restart or something similar. Alternatively the object that was created could be linked to the session of the user that created it and once that session ends it kills the object (not sure if this is valid as I would expect that the object, once in Application scope, would remain for the life of the application).

The permissions error could be on a folder location or on a registry key entry.

You should be able to replicate the event but taking the site down and making sure the first person to sign in does not have admin rights. Once you can replicate the event you can chase down the root cause using process monitior (Process Monitor) which will show all failed attempts on files and registry entries.

Let me know if you need more information on this.

thanks. problem is solved

Very very late update, but in the end I redid the entire IIS and all is working again. Still to this day I have no idea what caused the problem, but redoing IIS solved the problem, I was desperate.