Everything was working just fine...then one time running the debugger and I'm given a 401.2 error from IIS Express 7.5. I created a new project and tested - worked fine. I ensured the web.config and other project settings where identical - still getting the error in the original project!
(I actually resolved this issue...but haven't seen documentation for this exact issue with my resolution anywhere, I'll add the answer momentarily...Yes, I already reviewed other 401.2 questions on Stackoverflow (and elsewhere) and they are not the same as the issue I was facing...)