Web Application hangs when Terminal Services client logs in

Archived from groups: microsoft.public.windowsnt.terminalserver.misc,microsoft.public.windowsnt.terminalserver.applications (More info?)

We have a customer that reports a problem with our software that appears
only under Terminal Services. We are not big Terminal Services users
ourselves, but do have some familiarity with it. Our product is a Managed
C++ assembly (mixed native and managed code) and in this case is being used
inside an ASP.NET web service. The customer reports:

"When one of our administrators logs onto the server using the MS Terminal
Services client, and then logs off - even without doing anything - our web
app fails at the point where <our product> is called. The component will not
work from this point on until the administrator logs back in and does an
iisreset. After some investigation, we have found that we can prevent this
problem if our administrators use the Terminal Services client without the
"/console" switch, but if an administrator logs onto the server directly -
and then logs off - the problem reappears. For reference, our application
is running in the Default Application Pool, using the NETWORK SERVICE
identity."

Can someone please help me understand what might be going on here? How
could a TS login impact what happens in a web app?

Thanks,

-Steve