Moved directory and now permalinks are not working

I’m using WordPress 3.1.2 and moved the directory from wordpress to newdirectory. However, now the permalinks are not working. I can change them back to the default and they will work find. When I try to change them to anything else they fail.

I have read a number of posts and tried a number of the solutions to no avail. I’m running on IIS 7 and the web.config file is below. I’ve tried changing “wordpress” to “newdirectory” and that doesn’t help either.

Any suggestions?

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