How to Troubleshoot WAS Fails to Start - Error 1326: The user name or password is incorrect

Symptoms

Attempts to start the Windows Process Activation Service (WAS) and the World Wide Web Publishing Service (W3SVC) may fail.

Starting W3SVC from the Services MMC fails with error:

Windows could not start the World Wide Web Publishing Service service on Local Computer.
Error 1068: The dependency service or group failed to start.

Starting WAS from the Services MMC fails with error:

Windows could not start the Windows Process Activation Service service on Local Computer. 
Error 1326: The user name or password is incorrect.

Starting W3SVC from a command prompt fails with error:

System error 1068 has occurred.
The dependency service or group failed to start.

Starting WAS from a command prompt fails with error: 

System error 1326 has occurred.
The user name or password is incorrect.

In the System Event Log you will find the following errors.

Log Name: System
Source: Service Control Manager
Date: 8/9/2022 4:20:28 PM
Event ID: 7023
Task Category: None
Level: Error
Keywords: Classic
User: N/A
Computer: Windows2019&Windows2022_IIS10
Description:
The Windows Process Activation Service service terminated with the following error: 
The user name or password is incorrect.

and

Log Name: System
Source: Service Control Manager
Date: 8/9/2022 4:20:28 PM
Event ID: 7001
Task Category: None
Level: Error
Keywords: Classic
User: N/A
Computer: Windows2019&Windows2022_IIS10
Description:
The World Wide Web Publishing Service service depends on the Windows Process Activation Service service which failed to start because of the following error: 
The user name or password is incorrect.

Cause

This situation results from both of the following being true.

1. Internet Information Services (IIS) is configured to use Shared Configuration.
2. The Password for the User configured to access the Shared Configuration Location was changed recently.  This could be a local user or a domain service account.

Resolution

Follow these steps to resolve this issue.

• Open Notepad.exe as an administrator.
• Open redirection.config in notepad.  File is located at: c:\windows\system32\inetsrv\config\.
• Locate the configurationRedirection line. It will look similar to this:

<configurationRedirection enabled="true" path="C:\Windows\System32\inetsrv\Config\Export\" userName="iisSharedConfigUser" password="[enc:IISCngProvider:p5w4RIuLVkS3mLjlJykvjayRCAJTLya6O6JYkYMHWLei7XPBfSxbpK6V2oVzUBOsFUejJob4zp1V0k11vflmq0N3XpUqwgJlCMXEAtWRt30=:enc]" />

• Update the password field with the new password.

<configurationRedirection enabled="true" path="C:\Windows\System32\inetsrv\Config\Export\" userName="iisSharedConfigUser" password="EnterNewPasswordHere" />

• Save redirection.config.
• Note: the new password is not encrypted.  This can be corrected in a later step.
• WAS and W3SVC will now start.  Use net start command or start from the Services MMC.

How to Re-encrypt the password.

NOTE: you will need to know both the new password and the original encryption key password to complete these steps.  The encryption key password is not the user's old password.

• Open the IIS Manager. 
• Select Shared Configuration. 
• Retype the password and confirm it.
• Click Apply.
• Enter the encryption key password, and click OK.
• Review redirection.config in notepad.exe to confirm the password is now encrypted.