Any ways after looking and trying different things I found that the issue was with the max response limit was exceeding. Of course it was hard because there was no detail error log information any where. The webservice class was not throwing any particular exception. IIS was just return the Error 500 with this message.
Message":"There was an error processing the request.","
Simply added this to the web.config where the .ASMX class lives and the problem was solved.
<jsonSerialization maxJsonLength="50000000" />