It sounds like you have already done the necessary steps to ensure that IIS has the correct permissions to write to the log file.
One thing you could try is to set the APP_LOG_LEVEL environment variable to debug in your .env file. This will allow you to see more detailed information about the error in the log file.
You could also try running the following command in the command line to ensure that the log file has the correct permissions:
chmod -R 777 storage/logs
This will give full read, write, and execute permissions to the log file.
If none of these solutions work, you could try setting up a virtual host in IIS and setting the APP_LOG_CHANNEL environment variable to errorlog in your .env file. This will allow IIS to write the log file to the IIS log directory.