I have spent a whole day trying to resolve this. I have a custom webserver and requests to it from Chrome or POSTman ReST client work fine. As soon a s I use webclient or httpw
I struggled with that issue for a long time, and eventually the problem was a custom header that I added to IIS... I copied the value from somewhere and it contained {cr}:
Open IIS Manager -> go to the web site -> on content view, choose "Response Headers".
check the custom headers on IIS, remove headers if they are not needed, and also see if a header has a malformed value.