I found out today that if IE security (Tools-> Internet options-> Security -> Internet or Intranet -> Custom level -> User authentication) is set to anonymous logon, you will get the above error. I didn’t find any mention for this cause so here it is.
The solution that worked for me:
Open your Internet Information Services manager and from the [your machine]/Web Sites/ Default Web Site node select the virtual folder which stores your project. Right Click and select Properties to select the ASP.NET tab page. Make sure the correct version ASP.NET Version is selected.