Did the server settings validate when the project was being created? Alternatively, navigate to "Project Properties > Flex Server" and click on Validate Configuration, do the settings validate?
I was able to click on Validate Configuration and it said it would overwrite what was already there, but it didn't cause an error.
But I can't get past the "Specify configuration for ColdFusion Service" page. I get the original error at the end.
Can you provide us the server configuration you entered in the Project creation wizard (New Flex Project -> Configure ColdFusion server wizard)?
The error shown looks like a configuration problem.