I hear your frustration, and I'd love to help if I can. I do have a few questions for you, and perhaps after thinking this through yourself this may stimulate your thoughts on what may be the problem and lead to a solution.
First, what is your environment? OS, IIS, ASP.NET, SQL, DNN versions including applied service packs. Second, would you please confirm this is a new DNN installation that has never worked. Third, could you provide a little info regarding your installation (i.e. I used the install files, I did not compile the source even though I downloaded it) and perhaps a summary of the steps used to install DNN?
When you say ASP.NET 2.0 is working, do you have a tiny test site (i.e. something non-DNN) you can run just to test? When I installed .NET 2.0, I thought the install was fine. I could select the appropriate ASP.NET version for the DNN site virtual directory, and I could even browse my test web page (really a simple html page with straight text that says just testing...). I knew my html file was not testing ASP.NET...
Is there any chance you might entertain the idea of starting from scratch? Can you think of a way to isolate this problem (i.e. is it an IIS permissions issue, something with ASP.NET, something specific to DNN, etc).
Please let me know, Dan. :)