Flystarter,

If you don't mind could you post a link to your site?  You can send it to me offline if you want.

When you update a module's settings in that same site does it work?

If so, then something must be specfically wrong with the data in the site settings page.
Check the data very carefully before and after clicking on submit.

For everyone elses benefit.  I checked the site, and all pages are blocking the WebResource.axd virtual file.

IIS logs may be the best way to find out why.

I also saw where people have had trouble with UrlScan.exe (an IIS lockdown tool) blocking this virtual file.

That is a very good question, and the answer will make us wiser for the next time someone is having this problem so I really want to know myself.