By VS I meant virtual server.  It sounds like you stumbled upon your error - you must use one DB string or the other, and you were trying to use both. 

The new error means you have not given the NETWORK SERVICE account full permissions on the site folders.  You may have and stripped them away via IIS config, but just go back and reset these or if you haven't, browse to the site folder in file explorer (or equiv in your hosted environ).  Right click on properties of the site folder and choose properties, then go to the security tab and make sure that account has full permissions.  This is clearly demonstrated in the documentation, so if you need a visual example - you can get that there, but it's fairly straightforward.  Make sure the account also has rights to all subfolders and files.  Once  you do this it should work fine. I'm not familiar with plesk or your environment, so there may be some different steps here, but that should be clearly documented by your host. 

This is one of the most common errors and easy to fix - let me know how it goes. 

I'd be interested in who your provider is.   I'm using Plesk over at PowerDNN and can compare my setting if you like.  Who is your provider?  Of course PowerDNN set up the 4.3.1 install for me - so all I needed to do is start playing...

Looks like your comment uncomment tags for the connection strings are not correct.

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