Go to the parent folder, right-click and select Properties. Select the Security tab, edit the permissions and Add. Click on Advanced and the Find Now. Select IIS_IUSRS and click OK and OK again.
The location of the file is currently in the %windir%\system32\inetsrv\config directory.
I had these exact symptoms and my issue was similar to Peter's. Was setting up an existing project on a new server. My project referenced the IIS7 URL Rewriting module, but that hadn't been installed yet on the new server. Installing it fixed my issue.
You can use the Microsoft Web Platform Installer to install it. Execute it, select Products, in the left menu select Server and find URL Rewrite in the list and install it.
Or you can download it here.
After battling with this for a day on a new machine I came across the following links. I was missing the rewrite modules. This fixed everything.
http://forums.iis.net/t/1176834.aspx
http://learn.iis.net/page.aspx/460/using-the-url-rewrite-module/
Aha! I beat this problem! My god, it was a beast for someone like me with limited IIS experience. I really thought I was going to be spending all weekend fixing it.
Here's the solution for anyone else who ever comes this evil problem.
First thing to be aware of: If you're hoping this is your solution, make sure that you have the same Error Code (0x8007000d) and Config Source (-1: 0:). If not, this isn't your solution.
Next thing to be aware of: AJAX is not properly installed in your web.config!
Fix that by following this guide:
http://www.asp.net/AJAX/documentation/live/ConfiguringASPNETAJAX.aspx
Then, install the AJAX 1.0 extensions on your production server, from this link:
http://www.asp.net/ajax/downloads/archive/
Update: Microsoft seems to have removed the above page :(
That's it!
Same issue on Server 2016, IIS 10, 500.19 error. I installed the redirect module and it worked. I do not know why this was not included by default.
https://www.iis.net/downloads/microsoft/url-rewrite#additionalDownloads
To be clear it looks like the web.config from IIS 7 will work, or is designed to work, but the lack of this module gives the really odd and unhelpful error. Googling takes you to a Microsoft page which insists that your site is corrupted or your web.config is corrupted. Neither seems to be the case.
That unhelpful page is here: https://support.microsoft.com/en-us/kb/942055
Had the same problem as above, same error code etc. Setting up a local website on Windows 8. After much searching it was found that we were missing URL rewrite. After downloading it everything was fine. :)
I just add an answear because I spent hours trying to solve the same symptoms (but different issue):
A possible cause is a x86 dll in a 64 bits app pool, the solution is to enable 32 bits apps in the application pool settings.
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