Today I was getting following error while writing to Event Log on Windows 2008 Server (also applicable to windows 2003 server) using .NET

The resolution worked for me was appending (A;;0x3;;;AU) in CustomSD without quotes under HKEY_LOCAL_MACHINE\System\CurrentControlSet\Services\Eventlog\EventLogName in windows registry where AU is referring to "Authenticated Users". Because in W2K3, the security of Application Event Log is controlled by CustomSD.
After appending the value would be similier to

O:BAG:SYD:(D;;0xf0007;;;AN)(D;;0xf0007;;;BG)(A;;0x f0007;;;SY)(A;;0x7;;;BA)(A;;0x7;;;SO)(A;;0x3;;;IU)(A;;0x3;;;SU)(A;;0x3;;;S-1-5-3)(A;;0x3;;;AU)


If CustomSD doesnt exists, then create a string named CustomSD and set its value to O:BAG:SYD:(A;;0x3;;;AU)

 P.S. Be careful by taking proper backup of registry before doing any change to it.