asmx Webservice does not work on IISExpress

We are migrating from IIS 5.1 to IISExpress on developer machines. We have ASP .NET app which also hosts some .asmx webservices. When using IIS 5.1 we can access wsdl using following URL

http ://localhost/MY_PATH/Service/WebServiceName.asmx?wsdl

However when I use IISExpress I can see all pages of my application successfully but when I try to see wsdl(http ://localhost/MY_PATH/Service/WebServiceName.asmx?wsdl) I get following error.

HTTP Error 404.17 - Not Found The requested content appears to be script and will not be served by the static file handler. Most likely causes: The request matched a wildcard mime map. The request is mapped to the static file handler. If there were different pre-conditions, the request will map to a different handler. Things you can try: If you want to serve this content as a static file, add an explicit MIME map.
Detailed Error Information: Module StaticFileModule Notification ExecuteRequestHandler Handler StaticFile Error Code 0x80070032 Please let me know what is going wrong here. Following is my applicationHost.config

<?xml version="1.0" encoding="UTF-8"?>
<configuration> 
    <configSections>
        <sectionGroup name="system.applicationHost">
            <section name="applicationPools" allowDefinition="AppHostOnly" overrideModeDefault="Deny" />
            <section name="configHistory" allowDefinition="AppHostOnly" overrideModeDefault="Deny" />
            <section name="customMetadata" allowDefinition="AppHostOnly" overrideModeDefault="Deny" />
            <section name="listenerAdapters" allowDefinition="AppHostOnly" overrideModeDefault="Deny" />
            <section name="log" allowDefinition="AppHostOnly" overrideModeDefault="Deny" />
            <section name="preloadProviders" allowDefinition="AppHostOnly" overrideModeDefault="Deny" />
            <section name="sites" allowDefinition="AppHostOnly" overrideModeDefault="Deny" />
            <section name="webLimits" allowDefinition="AppHostOnly" overrideModeDefault="Deny" />
        </sectionGroup>    

        <sectionGroup name="system.webServer">
            <section name="asp" overrideModeDefault="Deny" />
            <section name="caching" overrideModeDefault="Allow" />
            <section name="cgi" overrideModeDefault="Deny" />
            <section name="defaultDocument" overrideModeDefault="Allow" />
            <section name="directoryBrowse" overrideModeDefault="Allow" />
            <section name="fastCgi" allowDefinition="AppHostOnly" overrideModeDefault="Deny" />
            <section name="globalModules" allowDefinition="AppHostOnly" overrideModeDefault="Deny" />
            <section name="handlers" overrideModeDefault="Deny" />
            <section name="httpCompression" allowDefinition="AppHostOnly" overrideModeDefault="Deny" />
            <section name="httpErrors" overrideModeDefault="Allow" />
            <section name="httpLogging" overrideModeDefault="Deny" />
            <section name="httpProtocol" overrideModeDefault="Allow" />
            <section name="httpRedirect" overrideModeDefault="Allow" />
            <section name="httpTracing" overrideModeDefault="Deny" />
            <section name="isapiFilters" allowDefinition="MachineToApplication" overrideModeDefault="Deny" />
            <section name="modules" allowDefinition="MachineToApplication" overrideModeDefault="Deny" />
            <section name="odbcLogging" overrideModeDefault="Deny" />
            <sectionGroup name="security">
                ...
            </sectionGroup>
            <section name="urlCompression" overrideModeDefault="Allow" />
            <section name="validation" overrideModeDefault="Allow" />
            <sectionGroup name="webdav">
                <section name="globalSettings" overrideModeDefault="Deny" />
                <section name="authoring" overrideModeDefault="Deny" />
                <section name="authoringRules" overrideModeDefault="Deny" />
            </sectionGroup>
            <sectionGroup name="rewrite">
                ...
            </sectionGroup>
        </sectionGroup>
    </configSections>

    <configProtectedData>
        <providers>
            ...
        </providers>
    </configProtectedData>

    <system.applicationHost>

        <applicationPools>
            <add name="Clr4IntegratedAppPool" managedRuntimeVersion="v4.0" managedPipelineMode="Integrated" CLRConfigFile="%IIS_BIN%\config\templates\PersonalWebServer\aspnet.config" autoStart="true" />
            ...
            <add name="IISExpressAppPool" autoStart="true" managedRuntimeVersion="v2.0" managedPipelineMode="Integrated" CLRConfigFile="%IIS_BIN%\config\templates\PersonalWebServer\aspnet.config" /> 
            <applicationPoolDefaults managedRuntimeLoader="v4.0">
            </applicationPoolDefaults>
        </applicationPools>

        <listenerAdapters>
            <add name="http" />
        </listenerAdapters>

        <sites>
            <site id="1" name="MySite"  serverAutoStart="true">
                <application path="/" >
                    <virtualDirectory path="/" physicalPath="C:\MyProject" />
                    <virtualDirectory path="/MY_PATH" physicalPath="C:\MyProject" />
                </application>
                <bindings>
                    <binding bindingInformation=":8080:localhost" protocol="http" />
                </bindings>
            </site>
            <siteDefaults>
                <logFile logFormat="W3C" directory="C:\app_tmp\IISExpress\iWin7.0\Logs" />
                <traceFailedRequestsLogging directory="C:\app_tmp\IISExpress\iWin7.0\Trace" enabled="true" maxLogFileSizeKB="1024" />
            </siteDefaults>
            <applicationDefaults applicationPool="Clr2ClassicAppPool" /> 
            <virtualDirectoryDefaults allowSubDirConfig="true" />
        </sites>    
        <webLimits />    
    </system.applicationHost>

    <system.webServer>
        <serverRuntime />    
        <asp scriptErrorSentToBrowser="true">
            <cache diskTemplateCacheDirectory="%TEMP%\iisexpress\ASP Compiled Templates" />
            <limits />
        </asp>    
        <caching enabled="true" enableKernelCache="true">
        </caching>

        <cgi />

        <defaultDocument enabled="true">
            <files>
                <add value="Default.htm" />
                <add value="Default.asp" />
                <add value="index.htm" />
                <add value="index.html" />
                <add value="iisstart.htm" />
                <add value="default.aspx" />
            </files>
        </defaultDocument>

        <directoryBrowse enabled="false" />

        <fastCgi />

        <globalModules>
            ...              
        </globalModules>

        <httpCompression directory="%TEMP%\iisexpress\IIS Temporary Compressed Files">
            <scheme name="gzip" dll="%IIS_BIN%\gzip.dll" />
            <dynamicTypes>
                <add mimeType="text/*" enabled="true" />
                <add mimeType="message/*" enabled="true" />
                <add mimeType="application/x-javascript" enabled="true" />
                <add mimeType="*/*" enabled="false" />
            </dynamicTypes>
            <staticTypes>
                <add mimeType="text/*" enabled="true" />
                <add mimeType="message/*" enabled="true" />
                <add mimeType="application/x-javascript" enabled="true" />
                <add mimeType="application/atom+xml" enabled="true" />
                <add mimeType="application/xaml+xml" enabled="true" />
                <add mimeType="*/*" enabled="false" />
            </staticTypes>
        </httpCompression>

        <httpErrors lockAttributes="allowAbsolutePathsWhenDelegated,defaultPath">
            <error statusCode="401" prefixLanguageFilePath="%IIS_BIN%\custerr" path="401.htm" />
            ...
            <error statusCode="502" prefixLanguageFilePath="%IIS_BIN%\custerr" path="502.htm" />
        </httpErrors>

        <httpLogging dontLog="false" />

        <httpProtocol>
            <customHeaders>
                <clear />
                <add name="X-Powered-By" value="ASP.NET" />
            </customHeaders>
            <redirectHeaders>
                <clear />
            </redirectHeaders>
        </httpProtocol>

        <httpRedirect enabled="false" />

        <httpTracing>
        </httpTracing>

        <isapiFilters>
            <filter name="ASP.Net_2.0.50727.0" path="%windir%\Microsoft.NET\Framework\v2.0.50727\aspnet_filter.dll" enableCache="true" preCondition="bitness32,runtimeVersionv2.0" />
            <filter name="ASP.Net_2.0_for_v1.1" path="%windir%\Microsoft.NET\Framework\v2.0.50727\aspnet_filter.dll" enableCache="true" preCondition="runtimeVersionv1.1" />
            <filter name="ASP.Net_4.0_32bit" path="%windir%\Microsoft.NET\Framework\v4.0.30319\aspnet_filter.dll" enableCache="true" preCondition="bitness32,runtimeVersionv4.0" />
        </isapiFilters>

        <odbcLogging />

        <security>    
            <access sslFlags="None" />    
            <applicationDependencies>
                <application name="Active Server Pages" groupId="ASP" />
            </applicationDependencies>    
            <authentication>    
                <anonymousAuthentication enabled="true" userName="" />    
                <basicAuthentication enabled="false" />    
                <clientCertificateMappingAuthentication enabled="false" />    
                <digestAuthentication enabled="false" />    
                <iisClientCertificateMappingAuthentication enabled="false">
                </iisClientCertificateMappingAuthentication>
                <windowsAuthentication enabled="false">
                    <providers>
                        <add value="Negotiate" />
                        <add value="NTLM" />
                    </providers>
                </windowsAuthentication>

            </authentication>

            <authorization>
                <add accessType="Allow" users="*" />
            </authorization>

            <ipSecurity allowUnlisted="true" />

            <isapiCgiRestriction notListedIsapisAllowed="true" notListedCgisAllowed="true">
                <add path="%windir%\Microsoft.NET\Framework\v4.0.30319\webengine4.dll" allowed="true" groupId="ASP.NET_v4.0" description="ASP.NET_v4.0" />
            </isapiCgiRestriction>

            <requestFiltering>
                <fileExtensions allowUnlisted="true" applyToWebDAV="true">
                    <add fileExtension=".asa" allowed="false" />
                    <add fileExtension=".asax" allowed="false" />
                    <add fileExtension=".ascx" allowed="false" />
                    ...
                    <add fileExtension=".rules" allowed="false" />
                </fileExtensions>
                <verbs allowUnlisted="true" applyToWebDAV="true" />
                <hiddenSegments applyToWebDAV="true">
                    <add segment="web.config" />
                    <add segment="bin" />
                    <add segment="App_code" />
                    <add segment="App_GlobalResources" />
                    <add segment="App_LocalResources" />
                    <add segment="App_WebReferences" />
                    <add segment="App_Data" />
                    <add segment="App_Browsers" />
                </hiddenSegments>
            </requestFiltering>

        </security>

        <serverSideInclude ssiExecDisable="false" />

        <staticContent lockAttributes="isDocFooterFileName">
            ...
            <mimeMap fileExtension=".application" mimeType="application/x-ms-application" />
            ...
        </staticContent>

        <tracing>

             <traceProviderDefinitions>
                <add name="WWW Server" guid="{3a2a4e84-4c21-4981-ae10-3fda0d9b0f83}">
                    <areas>
                        <clear />
                        <add name="Authentication" value="2" />
                        <add name="Security" value="4" />
                        <add name="Filter" value="8" />
                        <add name="StaticFile" value="16" />
                        <add name="CGI" value="32" />
                        <add name="Compression" value="64" />
                        <add name="Cache" value="128" />
                        <add name="RequestNotifications" value="256" />
                        <add name="Module" value="512" />
                        <add name="Rewrite" value="1024" />
                        <add name="FastCGI" value="4096" />
                    </areas>
                </add>
                <add name="ASP" guid="{06b94d9a-b15e-456e-a4ef-37c984a2cb4b}">
                    <areas>
                        <clear />
                    </areas>
                </add>
                <add name="ISAPI Extension" guid="{a1c2040e-8840-4c31-ba11-9871031a19ea}">
                    <areas>
                        <clear />
                    </areas>
                </add>
                <add name="ASPNET" guid="{AFF081FE-0247-4275-9C4E-021F3DC1DA35}">
                    <areas>
                        <add name="Infrastructure" value="1" />
                        <add name="Module" value="2" />
                        <add name="Page" value="4" />
                        <add name="AppServices" value="8" />
                    </areas>
                </add>
            </traceProviderDefinitions>

            <traceFailedRequests>
                <add path="*">
                    <traceAreas>
                        <add provider="ASP" verbosity="Verbose" />
                        <add provider="ASPNET" areas="Infrastructure,Module,Page,AppServices" verbosity="Verbose" />
                        <add provider="ISAPI Extension" verbosity="Verbose" />
                        <add provider="WWW Server" areas="Authentication,Security,Filter,StaticFile,CGI,Compression,Cache,RequestNotifications,Module,Rewrite" verbosity="Verbose" />
                    </traceAreas>
                    <failureDefinitions statusCodes="200-999" />
                </add>
            </traceFailedRequests>

        </tracing>

        <urlCompression />

        <validation />
        <webdav>
            <globalSettings>
                <propertyStores>
                    <add name="webdav_simple_prop" image="%IIS_BIN%\webdav_simple_prop.dll" image32="%windir%\syswow64\inetsrv\webdav_simple_prop.dll" />
                </propertyStores>
                <lockStores>
                    <add name="webdav_simple_lock" image="%IIS_BIN%\webdav_simple_lock.dll" image32="%windir%\syswow64\inetsrv\webdav_simple_lock.dll" />
                </lockStores>

            </globalSettings>
            <authoring>
                <locks enabled="true" lockStore="webdav_simple_lock" />
            </authoring>
            <authoringRules />
        </webdav>

    </system.webServer>
    <location path="" overrideMode="Allow">
        <system.webServer>
            <modules>
                ...
            </modules>
            <handlers accessPolicy="Read, Script">
                ...
                <add name="WebServiceHandlerFactory-ISAPI-4.0_32bit" path="*.asmx" verb="GET,HEAD,POST,DEBUG" modules="IsapiModule" scriptProcessor="%windir%\Microsoft.NET\Framework\v4.0.30319\aspnet_isapi.dll" preCondition="classicMode,runtimeVersionv4.0,bitness32" responseBufferLimit="0" />
                ...
                <add name="SimpleHandlerFactory-Integrated" path="*.ashx" verb="GET,HEAD,POST,DEBUG" type="System.Web.UI.SimpleHandlerFactory" preCondition="integratedMode" />
                ...
                <add name="WebServiceHandlerFactory-Integrated" path="*.asmx" verb="GET,HEAD,POST,DEBUG" type="System.Web.Services.Protocols.WebServiceHandlerFactory,System.Web.Services,Version=2.0.0.0,Culture=neutral,PublicKeyToken=b03f5f7f11d50a3a" preCondition="integratedMode,runtimeVersionv2.0" />
                ...
                <add name="StaticFile" path="*" verb="*" modules="StaticFileModule,DefaultDocumentModule,DirectoryListingModule" resourceType="Either" requireAccess="Read" />
            </handlers>
        </system.webServer>
    </location>
</configuration>

You likely do not have the static content role installed in IIS express. See this question and answer for a similar problem/resolution and see if it helps you:

How to install umbraco in root folder of the IIS server in localhost?