HTTP/1.1 New Application Failed

I had the same issue moving a website from one hosting account (classic windows) to another (plesk), both on GoDaddy. After much headache troubleshooting, I managed to fix it by removing the whole <asp> tag from the web.config file;

    <!-- <asp scriptErrorSentToBrowser="true"/> -->

IIS 8 (only option in plesk) does not support this option altogether and configuring detailed error messaging is done differently using:

    <httpErrors errorMode="Detailed" existingResponse="PassThrough" />

You can find further instructions on this GoDaddy support page

I just encountered the same error this morning after renaming some Websites in IIS. A restart of IIS got my sites up and running again in seconds. Presumably the .config files are read on startup and 'likely' the cause of this error for me.