My apologies, I thought that I had replied.
While SQL Monitor does support IIS, unfortunately we cannot support the configuration of IIS. The problem is that without an intimate knowledge of your IIS setup it is incredibly difficult for me to diagnose any IIS problem, including the cause of your HTTP 401.2 error.
I do know that other users have done what you are trying to do, and I have pointed them towards the link below on the iis.net website as a starting point.
http://www.iis.net/configreference/syst ... entication
I'm sorry again for the delay and for not being able to provide much help.