IIS 7.5 Windows Authentication failed with 401
We had a two-hop problem I think. If I move our SQL/Oracle DB to the server which is running IIS it works.
So here is an article to which describes a solution.
How to configure SQL and IIS for two hop kerberos authentication 2
or SSRS Reportviewer ASP.NET Credentials 401 Exception
Thanks
Which client are you using? you might be running a client that is trying to pre-authenticate, but in IIS 7 we use Kernel Mode authentication by default which requires a challenge. If that is the case you can disable Kernel Mode auth by selecting the Windows Authentication entry and clicking Advanced Settings, you should see a checkbox that allows you to Disable that for the specific application and it should work if this is the problem.