The first discovery over last few weeks of trying Amazon Free Tier is that it is way too slow, when instance is a Windows OS. Well, what I could expect from virtual machine with just 630 MB of available RAM. It is a miracle that Windows 2012 server can possibly run on such low memory footprint at all. Everything I tried actually worked successfully, but the speed was just terrible. Eventually, my confidence with running EC2 grew, so I decided to buy a decent m2.small instance with 2 GB of RAM, prepaid for next 3 years and never use Free Tier again. After all, my hobby time on weekends is a quality time. I don't like situation, when some anonymous slow machine steals minutes of my personal time.
At this moment, your IIS has several application pools running under some random identities and already contains default ASP.NET application and Deploy application. The best way to avoid problems with broken access to wwwroot subfolders is to delete unnecessary pools, applications and wwwroot folder content and recreate only necessary folders under predictable identity of single Application pool.
At this state the IIS has a service listening on 8172 port with application named Web Deploy with correct local Windows account and less expected problems of accessing the wwwroot folder content. This application will be the front door for installation of Umbraco application. Using remote Web Deploy is better than manual manipulations with folders, files, zips, restarts and permissions.
<add name="umbracoDbDSN" connectionString="Data Source=|DataDirectory|Umbraco.sdf" providerName="System.Data.SqlServerCe.4.0"/>
There are few small typos, fixed with help of validator.
Also some bug (?) in validator makes validation to fail on single element.
One immediate thing I noticed, is that binding of Default Web Site to hostname.com only makes www link returning 404. This is caused by Yahoo Domains redirecting all *.hostname.com traffic to same IP.
After trying and failing to use various redirect tricks I gave up and decided simply to add one more binding to Default Web Site. It seems that well working redirecting is not trivial as it seems.
Perhaps later, I will add extra web site with simple default page redirecting all traffic to canonical hostname.