|Well, I can think of a couple of different options.
You could create some process that copies the files from the network to the local web server.
If the files aren't a big security risk, you could create a share for that folder and give everyone rights to it. NOTE still not a great idea even if is just on your local intranet.
So you are left with the final option.
This one is a little bit more involved, but I think it will work well.
First create a domain user account (or have your domain admin create the account for you)
Find what ever app pool your site is running on. If you are currently running on the default app pool I would suggest creating a new one for this site.
In the app pool go to the identity tab. Set the identity to be the domain user you created. NOTE this domain user must be in the IIS_WPG group on the web server box.
Next give the domain user the correct rights locally and on the network folder.
It is a bit of work, but in the end it is probably the best choice.
The other cool thing you can do when you have your web app using the app pool identity. You can use NTAuthentication for you sql connection. You just have to change the connection string and set up that domain user with the correct rights on your sql server.
Ok that was probably more then you wanted to know.
Hope that helps.