Windows 2003 application event log error Could not create a Disk Cache Sub directory for the Application Pool

If you are receiving an error like this:
Event Type: Error
Event Source: Active Server Pages
Event Category: None
Event ID: 5
Date: 7/11/2010
Time: 7:07:24 PM
User: N/A
Computer: SV2360
Error: The Template Persistent Cache initialization failed for Application Pool ‘’ because of the following error: Could not create a Disk Cache Sub-directory for the Application Pool. The data may have additional error codes..
For more information, see Help and Support Center at
0000: 05 00 00 00 –