Can not create new Wer Service for BizTalk Schema

[PeterS]

I am trying to create new web service for existing schema by using
BizTalk Web Services Publishing Wizard.
By clicking create button I got the following error message
Web Access Failed
The default Web access mode for this project is set to file share, but
the project folder at ‘http://localhost/AccidentInvest_Info' cannot be
opened with the path ‘C:\Solution\Accident Solution\Accident
Solution\AccidentInvest_Info'. The error returned was:
Unable to create Web project ‘AccidentInvest_Info'. The file path
‘C:\Solution\Accident Solution\Accident Solution\AccidentInvest_Info'
does not correspond to the URL ‘http://localhost/AccidentInvest_Info'.
The two need to map to the same server location. HTTP Error 403:
Forbidden

I have my VS 2003 installed in my Windows Server 2003; I also have a
Share Point Service running on the same server. Reading articles about
same issues, I verify that my proxy is bypass local sites, my
directory is virtual, I have a temp file under MIME types and I even
disabled Automatically Detect Settings under communications. Any of
that helps.
Any ideas?
Thanks
Peter