Thank you, Bertrand. I got the manual upgrade to work finally.
For anyone who may find this thread, if you are new to using IIS 7.5 you actually need to add r/w permissions for the virtual application pool user rather than Network Service.
Here is the information on application pool identities that helped me:
Also from the Orchard documentation:
Running the Site Using IIS
To use IIS, extract the contents of the Orchard folder from the .zip file to an IIS virtual directory (or site root), and then view the site using a browser. If you are using IIS 7, configure it to run in integrated mode, and configure the application
pool to run the .NET Framework version 4.
You might have to set read/write permissions for the account that is configured as the identity for the IIS application pool on the following folders:
- Modules. This is required if you want to install modules from the gallery. (We recommend that you remove the read/write permissions for production sites.)
- Themes. This is required if you want to install themes from the gallery. (We recommend that you remove the read/write permissions for production sites.)
- AppData_. This folder is where Orchard stores site settings.
- Media. This folder is where Orchard stores media files (images, etc.).
If you want to completely reset an Orchard site configuration to its default settings, you can delete the
AppData_ directory. This removes all your custom settings, users, and configuration, as well as any custom data you have added to the site. If you delete the
AppData_ folder, and if you want to remove custom images that you have added to the site, you can delete the
Media folder as well.