IIS 7.5 returning 403 in WebDAV PROPFIND request

I am configuring an IIS 7.5 server for WebDAV. When the client application issues a anonymous PROPFIND request to read the directory contents, the server returns a 403 Forbidden status. I need it to return a directory listing. What do I need to do to fix this? We have this working correctly on an IIS 6.0 server.

Set Up:

1. A virtual directory has been created that points to a share on a file server. IIS is configured to connect using as specific account.
2. WebDAV has been installed, and enabled.
3. WebDAV annonymous property requests have been enabled.
4. A WebDAV rule has been created on the virtual directory above to allow read requests for all content and all users.
5. Only annonymous authentication is enabled.

Troubleshooting:

• If I browse the directory using IE, I get a directory listing, so the directory browsing works.
• The IIS Failed Request Log contains the following entries:

  No.  Severity   Event                                                                             Module Name 
  93   Warning    -MODULE_WARNING                                                                   WebDAVModule
                  ModuleName          WebDAVModule
                  Data1               Invalid Depth: For PROPFIND Not Allowed Due To Configuration
                  Data2
                  ErrorCode           0
                  ErrorCode           The operation completed successfully. (0x0)
  94   Warning    -MODULE_SET_RESPONSE_ERROR_STATUS                                                 WebDAVModule
                  ModuleName          WebDAVModule
                  Notification        128
                  HttpStatus          403
                  HttpReason          Forbidden
                  HttpSubStatus       22
                  ErrorCode           0
                  ConfigExceptionInfo
                  Notification        EXECUTE_REQUEST_HANDLER
                  ErrorCode           The operation completed successfully. (0x0)