I finally got Web Service debugger to work, after reinstalling .NET framework.
I can see Web Service definition when I run the project. However, when I
add a client to the solution, and try to Add Web Reference, I get the following
error.

When I open the 'Add Web Reference' Dialogue box and point to Url of the
Web Service's .asmx file, I can see the methods in the left pane, however
in the right pane I get the following error.

The request failed with HTTP status 407: Proxy Authentication Required (
The ISA Server requires authorization to fulfill the request. Access to the
Web Proxy service is denied. ). It does not allow me to add web reference.

I am using intergrated windows authenitcation mechanism.

Any Ideas would be appreciated. Thanks