Two days later, having tried re-installing DNN, SQL, iis, and reconfiguring per all the above - all to no avail, I finally discovered (BY READING) the event log error I was getting.

The application-specific permission settings do not grant Local Activation permission for the COM Server application with CLSID

{61738644-F196-11D0-9953-00C04FD919C1}

to the user <serverName>\IIS ADMIN Service SID (S-1-5-21-<serviceSID>). This security permission can be modified using the Component Services administrative tool.

HERE's the fix that worked for me:

Copy the GUID following the CLSID above, {61738644-F196-11D0-9953-00C04FD919C1}  and Start-->Run-->regedit

With the registry editor open, ensure that your cursor is on the computer at the beginning of the tree (make sure you are not in the middle of some previous edit session in the registry editor).

Edit-->Find and paste in the GUID. It'll stop at the application entry - and you will want to note the application name on the right side pane. In this example, it was the IIS admin service that popped up.

Now, open Component Services (typically, from the server - Start-->Administrative Tools-->Component Services), expand Component Services, Computers, My Computer, DCOM Config. Scroll down and find the application (IIS ADMIN in this case). Right-Click-->Properties and select the Security tab. You'll have some options here - the first block Launch and Activation Permissions - ensure that the Customize radio button is selected, and click Edit. Now, add your service account ( DOMAIN\ASPNET in my case) - giving it launch and activate - and in some requirements - remote launch / activate permission.

Restart IIS and continue on.

Thanks for the tips above. Hope this helps someone else though.