The CaptchaImage images and comments worked fine on my local machine.   With no difference in settings or permissions, my site threw javascript errors when saving comments, and the CaptchaImage images failed to appear.   I tried to research it, but found only one person that claimed to have the same issue with no resolution.

I read many posts saying that using dasBlog 1.9.6264.0 on 2.0 Framework had serious issues.   I couldn't believe what I was reading since everything was working fine in 2.0 on my local machine, and only the comments were failing on my site.   I changed the app to use the 1.1 Framework and made the required web.config changes.   The result: add two more items to the list of things that don't work on dasBlog 1.9.6264.0 with 2.0 Framework.

Look ma, comments are working!