This will be caused by a web.config file existing in a directory that is not marked as an application in IIS. If this is the case, then you will need to:

open up your IIS console,
right click on the application directory,
select properties
select the Directory tab
Click "Create" (to create an application).


If the directory is already an application, then check your subdirectories for other offending web.config files. Unless you are intentionally setting up some specific configuration, there shouldn't be any others.

Hope this helps!

Brandon

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Brandon Haynes
BrandonHaynes.org