I get the sense that you have kept your old web.config file when upgrading rather than using the new one. It is possible you have a number of things out of synch that could be affecting your installations.
You should back up your web.config and use the one that ships with the version of mojoPortal installed and restore any customizations, especially things like your custom machine key need to remain the same so you need to restore that to the new web.config.
In the latest version of mojoPortal the entire <system.web.servicemodel section is commented out.
You can safely remove it entirely from your web.config file, it is not needed
That section defines some web services that can be used to authenticate from Silverlight, it works and some people are using it for custom features, but so far we are not using it in mojoPortal directly. I implemented that and used it some proof of concept things only so far.
Hope it helps,