I got this message today after copying a working web application from one server to the other.
The web application was configured as virtual directory on both places.
Same exact web.config and same DLLs.
It turns out to be the website folder itself:
In the original working machine the website folder was valid and empty, while on the problematic server – the website was pointing to not existing folder.
I guess that when WCF looks for the web.config – it has the rule to go up to see if there are any web.config in the hierarchy above – and it failed on the not existing folder.
Hope it will help someone.