The source was not found, but some or all event logs could not be searched

EventLog.SourceExists enumerates through the subkeys of HKLM\SYSTEM\CurrentControlSet\services\eventlog to see if it contains a subkey with the specified name. If the user account under which the code is running does not have read access to a subkey that it attempts to access (in your case, the Security subkey) before finding the target source, you will see an exception like the one you have described.

The usual approach for handling such issues is to register event log sources at installation time (under an administrator account), then assume that they exist at runtime, allowing any resulting exception to be treated as unexpected if a target event log source does not actually exist at runtime.

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