Exception when running Azure Cloud Project

I have created an azure cloud project in visual studio.

1) Used the "Convert to Azure" feature.

2) Added a Https endpoint and certificate.

Attempting to run the project with the azure emulator locally "without debug" the emulator hangs. If I run the project with debugging it seems to start but i get the following exception:

A first chance exception of type 'System.ServiceModel.FaultException`1'     occurred in System.ServiceModel.dll

Additional information: Invalid name.

Parameter name: name

After the exception sites fails to continue.

I was wondering if anyone has experienced this issue and how they resolved it?

Additional Information:

.net 4.5.1 framework.  
IIS: version 7.5
Azure SDK 2.6

So looking into the WaIISHost.Log I have found the following exception which keeps being thrown:

WaIISHost Information: 0 : [00014196:00000001, 2015/07/15     07:45:38.428,ERROR]         Exception:System.ServiceModel.FaultException`1[System.ServiceModel.ExceptionDeta    il]: Invalid name.
Parameter name: name (Fault Detail is equal to An ExceptionDetail, likely     created by IncludeExceptionDetailInFaults=true, whose value is:
System.ArgumentException: Invalid name.
Parameter name: name
   at     System.Security.AccessControl.NativeObjectSecurity.CreateInternal(ResourceType     resourceType, Boolean isContainer, String name, SafeHandle handle,     AccessControlSections includeSections, Boolean createByName,     ExceptionFromErrorCode exceptionFromErrorCode, Object exceptionContext)
   at System.Security.AccessControl.FileSystemSecurity..ctor(Boolean     isContainer, String name, AccessControlSections includeSections, Boolean     isDirectory)
   at System.Security.AccessControl.DirectorySecurity..ctor(String name,     AccessControlSections includeSections)
   at System.IO.DirectoryInfo.GetAccessControl(AccessControlSections     includeSections)
   at     Microsoft.WindowsAzure.ServiceRuntime.IISConfigurator.FileManager.AddAllowAceIte    rative(DirectoryInfo dir, FileSystemRights rights, IdentityReference[]     accounts)
   at Microsoft.WindowsAzure.ServiceRuntime.IISConfigurato...).

Solution

I found a solution to my issue in the end.

I'll be completely honest, i'm not entirely sure if its due to long path names as suggested by @spender or if its something else. I had a folder on my C drive called Dev:

C:\Dev\AzureSolutionExample\Source

I basically moved it directly onto the C drive and everything started working.

C:\AzureSolutionExample\Source