think the error is happening becasue there is some issue with identity linked to TFS Service/app pool. I am assuming the password for identity has not expired and the identify has all the permissions mentioned in install guide.

Can you please check one thing for me?

Check if the identity linked to TFS is in IIS_WPG group on the server. If it is not in this group can you add it and check if it works.

Please let me know what you find.

regards