HTTP Error 401.1 - Unauthorized: Access is denied due to invalid credentials
First thing to do:
1-Start a command prompt.
2-Locate and then change to the directory that contains the Adsutil.vbs file. By default, this directory is C:\Inetpub\Adminscripts.
3-Type the following command, and then press ENTER:
cscript adsutil.vbs set w3svc/NTAuthenticationProviders "NTLM"
4-To verify that the NtAuthenticationProviders metabase property is set to NTLM, type the following command, and then press ENTER:
cscript adsutil.vbs get w3svc/NTAuthenticationProviders
5-The following text should be returned:NTAuthenticationProviders : (STRING) "NTLM"
The second thing to do:1-To solve this problem the best way is go to IIS->default site->your webservice virtual folder
2-Right click->properties-.directory security->edit
3-Be sure that everything is like this:
If you still having problems, just fllow this KB from Microsoft (Good luck)