Access Denied using SP SSOM from WCF IIS-hosted application

Sharepoint 2013 Server running on Win2008 R2

Visual Studio 2012

Have created a Windows c# Library (call it 'LibDec') including the code shown below, the purpose of which is to declare a record

Tested the code using a c# console application within the same VS solution; works perfectly and as expected.

Created a new WCF Service project (call it 'WCFS') and in WCFS referenced compiled version of LibDec library

Configured VS to use the 64-bit edition of IIS Express to debug and test WCFS

Created another separate console solution to test WCFS. Configured basicHttpBinding. Tested. All of this works perfectly and as expected:

Console test app calls WCFS > WCFS References 'LibDec' > 'LibDec' declares a record in Sharepoint

All good up to this point

Next, deploy the WCF service to IIS 7.5 to test and debug against the 'production' deployment scenario. Configured the IIS 7.5 site to use its own application pool running under the Sharepoint Site account, call it SPSetup.

SPSetup has full rights to the Sharepoint Site

Configured bindings to use Impersonation to ensure that the WCF service runs under the Security context of the Windows account that has Full Sharepoint rights

My code now generating this ACCESS DENIED exception, which I cannot resolve.

Have added code to the catch block to check that the code is executing under the context of the account I expect, and it is.

What am I doing wrong?

        public static int DeclareRecord(String siteUrl,
                                            String listTitle,
                                            int listItemID,
                                            String eventLogSource)
        {
            int r = 0;
            SPWeb oWeb = null;
                SPList oList = null;
                SPSite oSite = null;
            try
            {
                SPSecurity.RunWithElevatedPrivileges(delegate()
                {
                    oSite = new SPSite(siteUrl);
                    oWeb = oSite.OpenWeb();
                });
                oWeb.Lists.ListsForCurrentUser = true;
                oList = oWeb.Lists[listTitle];
                SPListItem oListItem = oList.Items.GetItemById(listItemID);

                if (!Records.IsRecord(oListItem))
                {   
                    Records.DeclareItemAsRecord(oListItem);
                    r++;
                }
            }
            catch (Exception e)
            {
                String wLoginName = ((oWeb == null) ? String.Empty : oWeb.CurrentUser.LoginName);
                System.Diagnostics.EventLog.WriteEntry(eventLogSource, String.Format("An exception was thrown trying to declare a record. The Windows Security Principal is {1}. The Sharepoint web user is {2}. {0}", 
                    new Object[] { e.ToString(), 
                                    System.Security.Principal.WindowsPrincipal.Current.Identity.Name.ToString(),
                                    wLoginName}));
                r = -1;
            }
            return (r);
        }