I just ran into this with our server in IIS 6. It was processed, making sure that in the system.web section (different for IIS7).
<httpHandlers>
<remove verb="*" path="*.asmx"/>
<add verb="*" path="*.asmx" validate="false" type="System.Web.Script.Services.ScriptHandlerFactory, System.Web.Extensions, Version=3.5.0.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35"/>
<add verb="GET" path="ScriptResource.axd" type="System.Web.Handlers.ScriptResourceHandler" validate="false"/>
</httpHandlers>
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