Deploying Webservice to IIS

Question

I have a .net V4.0 web service that needs to be deployed to IIS, but when I attempt to call my web service on IIS I get the following error,

"Showing a modal dialog box or form when the application is not running in UserInteractive mode is not a valid operation.Specify the ServiceNotification or DefaultDesktopOnly style to display a notification from a service application"

I do not get this error when I run from visual studio, one thing I should note is that this error is coming from a .net V2.0 dll (web service works on IIS without the dll) that I have in the project (which was created in powerbuilder then deployed to .net). The dll contains nothing visual. I have tried placing the below into the web.config and it does not help. Maybe I am not understanding something critical when it comes to .NET 2.0 and 4.0 compatibility. 

<startup useLegacyV2RuntimeActivationPolicy="true">               
  <supportedRuntime version="v4.0" />     
  </startup>

Answer 1

Update

The above issue was solved by upgrading my dll to v4.0, the outstanding problem is getting my dll recognized by my program on the IIS. I ran process monitor on w3wp.exe and noticed it went out and found all the dlls loaded them successfully, but still throws up an error that it cannot find the dll. I should note that when I run this application through VS2010 it works fine as the dlls are registered in the GAC on the machine, but on the IIS server it cannot find the dlls.

Any thoughts?