“There was an error while performing this operation”

Add this to the checklist.

• Make sure that the machine.config you check is from the same Dot Net framework as the application pool your application is running under.

In my case the default application pools was changed from Dot Net 2.0 to Dot Net 4.0. This changed the root machine.config to the 4.0 version. This version contains the "scriptResourceHandler" section as well as others. Thus the duplicate section warning.

There is no problem with your web.config. Your web site runs under a process. In iis you can define the identity of that process. The identity that your web site's application pool runs as (Network Services, Local System, etc.), should have permission to access and read web.config file.

Update:

This updated answer is same as above, but a little longer and simpler and improved.

First of all: you don't have to change anything in your config file. It's OK. The problem is with windows file permissions.

This problems occurs because your application can not access and read web.config file.

Make the file accessible to IIS_IUSRS group. Just right click web.config and click properties, under security tab, add IIS_IUSRS.

So what is this IIS_IUSRS thing?

Your web site is like an exe file. Just like any exe file, it should be started by a user and it runs according to permissions assigned to that user.

When your site is started in IIS, Application Pool of your web site is associated with a user (Network Services, Local System, Etc. ...) (and can be changed in IIS)

So when you say IIS_IUSRS, it means any user (Network Services, Local System, Etc. ...) that your site is running as.

And as @Seph mentioned in comment below: If your computer is on a domain, remember that IIS_IUSRS group is a local group. Also make sure that when you're trying to find this user check the location it should be set to local computer and not a corporate domain.