That's very strange and although I never tested it, I have no idea why IIS should provoque this.
Could you add these lines
echo '<!--';
print_r($query->query);
print_r(is_home());
echo '-->';
in the file polylang/include/core.php at line 417, just above:
// homepage is requested, let's set the language
It won't solve your issue but may help me.