Repeated 401 error on EWS for Hybrid

Question

Hi,
I've been in touch with MS Support but haven't got anywhere, so I thought I'd try a wider knowledge base.
I'm trying to configure a hybrid between Exchange Online and Exchange 2010. I've configured on premise servers but am failing when trying to create the migration endpoint in Exchange Online. Autodiscover and OWA are working correctly both internally and
externally. When I try to access either https://internalurl/EWS/Exchange.asmx or the external version I'm getting 401 error.
I have compared the output from "get-webservicesvirtualdirectory |fl" with my working test lab and it all looks okay, including Authentication Methods Ntlm, WindowsIntegrated, WSSecurity.
I have noticed that in IIS > EWS > Authentication that Forms Authentication is enabled which it isn't on my test lab. If I disable this I get Resource cannot not be found 404 error.
For the Migration Endpoint, I'm getting error MRSProxy cannot be found on the server. But this is True on the "get-webservicesvirtualdirectory |fl" command.
Thanks,
Chris

Answer 1

Typical. After 3 days troubleshooting, I post online then find the answer an hour later!
For anyone else who comes across this, I found the answer in two parts in IIS:
EWS Virtual Directory > Authentication >Ensure only Anonymous and Windows Authentication are enabled (I had Basic and Forms enabled)
Application Pools on the server > MSExchangeServicesAppPool was running under ApplicationPoolID Identity. Right click and choose Advanced Settings > Change Identity to LocalSystem.
Restart IIS > Bingo!