Service reference error when moving dev. environment from XP to W7 - vb.net

Question

I am building an application and I am using web services for getting data from a server. It was working fine when I was developing on my XP machine but had to switch to Windows 7. On the new machine I grabbed the latest version of the code using sourcesafe.
However, when I try to add a service reference in the solution or update an existing one I get the following error:
There was an error downloading 'http://localhost:52490/Service/CustomerService.asmx'.
The request failed with the error message:
Server Error in '/' Application.
Parser Error
Description: An error occurred during the parsing of a resource required to service this request. Please review the following specific parse error details and modify your source file appropriately.
Parser Error Message: Could not create type 'Digital_Server.CustomerService'.
Source Error
Source File: /Service/CustomerService.asmxLine: 1
Version Information: Microsoft .NET Framework Version:2.0.50727.4927; ASP.NET Version:2.0.50727.4927
--.
Metadata contains a reference that cannot be resolved: 'http://localhost:52490/Service/CustomerService.asmx'.
An error occurred while receiving the HTTP response to http://localhost:52490/Service/CustomerService.asmx. This could be due to the service endpoint binding not using the HTTP protocol. This could also be due to an HTTP request context being aborted by the server (possibly due to the service shutting down). See server logs for more details.
The underlying connection was closed: An unexpected error occurred on a receive.
Unable to read data from the transport connection: An existing connection was forcibly closed by the remote host.
An existing connection was forcibly closed by the remote host
If the service is defined in the current solution, try building the solution and adding the service reference again.
Does it has anything to do with the IIS or is it any configuration file I have to change in the solution?
Any help is appreciated.

Answer 1

How do you deploy your app to the server? Via a zip file?
Perhaps it extracts the files without the path.