OAB - Exchange 2007 Hung Send/Receive

Client had an issue with Outlook hanging for 10-15 minutes on "Send / Receive". Initially treated as a client issue, checking the Send/Receive status showed a pause on the Offline Address book download (all clients are RPC over HTTP/s in this case) .

Troubleshooting this I used the AutoDiscover test tool built into outlook:
1. CTRL-Right Click Outlook Icon
2. Click "Test Email Autoconfiguration"
3. Fill the email address and password, check only Auto Discover method.

You will see in the XML results view a address to the OAB, copy and paste this into IE. You should see a authentication prompt. In my case I saw a Error 500, odd.

Looking more into the directories on the server it looks the web.config in the base OAB dir was missing read/view permissions, all others has:

"SERVERNAME"\IIS_IUSRS (read/view)
"SERVERNAME"\Users (read / view)

I manually added these permisisons to the OAB dir's web.config file, everything came back.

Symptoms: after the fact were found to be delayed emails (2 hours sometimes), as well as inability to see newer versions of the GAL and hung send/receive on Outlook.