It is an error to use a section registered as allowDefinition='MachineToApplication' beyond application level. This error can be caused by a virtual directory not being configured as an application in IIS.

There is a similar discussion here on SO with some good solutions for this issue.

The problem is that building a deployment package creates a copy of the web.config in a subfolder of /obj. That will normally be be cleared out if you do a rebuild or a clean. However, if you build a deployment package in one configuration (e.g. Debug) and then switch to another confguration (e.g. Release) the obj/Debug folder is not cleared out and the web.config file there causes problems.

The quick solution is to clean all configurations and then do a (re)build. Alternatively you could delete the /obj folder in your project. To permanently resolve the issue you can either move the intermediate output (/obj) out of your project folder or modify the project to force a clean of all configurations on rebuild. 

http://forums.asp.net/t/769696.aspx

Thanks...