Virtual Directory looking at parent web.config
Web Application inside a virtual directory refers web.Config of parent directory and error related to that configuration file encountered .
Solution for this is to include a statement :
<location path="." inheritInChildApplications="false">
You have to insert the <location> tag as mentioned above in the parent web.Config .
For Reference : http://forums.asp.net/t/1164283.aspx?Virtual+Directory+looking+at+parent+web+config