This is driving the whole team crazy. There must be some simple mis-configured part of IIS or our Web Server, but every time we try to run out ASP.NET Web Application on IIS
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!