Windows/IIS Permalinks Bug?

I am getting ready to move an established WordPress site to a new server. I decided to start with a fresh database. I installed WP 2.3.2 on the new server and used the WordPress importer to import the old content. I had everything setup and was ready to flip the switch when I noticed I had my permalinks wrong. So I wouldn’t get 404’s on the old content I upgraded the permalinks to match the old sites. I used /%post%/ on the old site. I had them set to /%category%/%post%/ on original setup due to a mistake on my part. Once I changed the permalinks every page redirected back to the index.

The server run Windows 2003 with IIS. I have HeliconTech isapi rewrite3 installed. The site worked perfectly until I upgrdaded the permalink structure.

To make sure this wasn’t a fluke I reinstalled WordPress again to a new database, imported the old posts, set the permaliinks to /%category%/%post%/. I browsed the site and every thing worked correctly. I then updated the permalinks to /%post%/, browsed the site and once again everything redirected back to the homepage.

I have another WordPress site that I upgraded to 2.3.2. To further test I set up another test site and moved the other WordPress site, database and all, and set it up. After I was sure everything worked I changed the permalink structure. Browsed the site and everything worked as it should. The permalink structure change did not redirect everything back to home page. since this site is also moving to the new server I decided to change the permalink structure back to what it was, change IP in DNS and open it up. After I changed the permalink structure back to original everything redirected back to index lie it did on the other site.

It looks like one permalink change works and subsequent changes don’t.

Is this a bug?

Sorry about the long post. I wanted to give as much info as possible.