I have an HttpHandler configured in my web.config file like so:
We have a legacy application where changing the webconfig to user system.webServer -> handlers was not an option. We solved this 404 issue by setting the application pool's "Managed Pipeline Mode" to "Classic" on our development machines.
Here is the blog post where I found this solution http://codeskaters.blogspot.ae/2014/04/httphandler-error-404-not-found.html