It might occur while attempting to edit a web service data source that you would receive the following error:
Steps to alleviate the issue are as follows:
1) Go to your instance of IIS
2) In the top right-hand side corner of the window, click on Explore
This will open up the web service folder.
3) Open the Web.config file
4) CTRL + F on your keyboard and locate the desired binding.
5) Change "add" to "remove" in binding
7) Open Command Prompt and type in: "iisreset"
Now go back into your template and try to edit your data source. In addition this try to merge with your content and see if this works correctly.
Once the above mentioned is confirmed you should be able to continue and the issue should be resolved.