Does Microsoft.Web.Services2.dll exist?
"If it ain't broke, don't fix it" is often true. But you've just had to maintain this code, which means "it's broke". WSE 2.0 is very obsolete. I strongly recommend that you at least upgrade to WSE 3.0, which will at least have minimal support for another
year or so.
John Saunders
WCF is Web Services. They are not two separate things.
Use WCF for All New Web Service Development, instead of legacy ASMX or obsolete WSE
Use File->New Project to create Web Service Projects