I hade the same problem, and it did happen just after a windows update, hmm...
First of all, someone (windows update) hade change the user account on the service "Windows Internal Database (MICROSOFT##SSEE)". Changed back to the right account and the WSS started to work, but with an error (Application / error or something)
This new problem was something I just got for free after I hade run the Exchange Analyzer tool and done some modifications to my system, that was recommended by the tool.
If i changed my web.config too look like this (c:/inetpub/wss-dir/web.config):
<!-- Web.Config Configuration File -->
<configuration>
<system.web>
<customErrors mode="RemoteOnly"/>
</system.web>
</configuration>
I discovered what the problem was, it was a access/security issue. The error message told me:
Access to the path "C:\WINDOWS\Microsoft.NET\Framework\v1.1.4322\Temporary ASP.NET Files\root\8c91a6b5\649b28ba" is denied.
But this was not the hole truth... the access denied was not to the ..\Temporary ASP.NET Files\root\8c91a6b5\649b28ba folder, it was to the %TEMP% folder, that I hade just moved due to a suggestion from the Exchange Analyzer Tool.
Have a nice day!