SharePoint Designer 2010 – You do not have permission to do this operation

I came across the following error while trying to open a SharePoint 2010 site in SharePoint Designer 2010:

“You do not have permission to do this operation. Ask your web site administrator to change your permissions and then try again, or log in with a user account that has this permission. To log on with a different user account click OK”

After spending sometime, it turns out the anonymous authentication was disabled in IIS for some reason.

After enabling the anonymous authentication, I was able to open the site collection in SharePoint Designer 2010.