Recently if your webservices started failing / timing out it its worth your time to take a look at this support article.
“HttpException (0x80004005): Request timed out.”
“System.InvalidOperationException: There were not enough free threads in the ThreadPool object to complete the operation”
Contention, poor performance, and deadlocks when you make Web service requests from ASP.NET applications
Related Reading :
Item 5 talks about Asp.Net WS