Trouble running .Net Service as LocalSystem

I have a C++ .Net Windows Service application that is deployed at several
customer sites. The application starts, and works perfectly at all of the
sites, except one. At one site the service will not start. They are running
a Windows 2003 server. The error message is “Error 1053: The service did not
respond to the start or control request in a timely fashion”.

However, the service will start if I change the “Log on” account property
from LocalSystem to the Admin account. This is the only site that I have to
run the application under the Admin account. The customer does not want to
run the service using the Admin account.

In addition, a native C++ service application starts with no problems. I am
guessing it is a .Net security setting. This site is more secure than the
others, so I believe they may have changed some settings on the server.

Is there a particular security setting that I need to update in order to get
the service to run as LocalSystem?