Unable to establish connection in Webmatrix to IIS

Server

Windows 2008 R2

IIS

.net4

Web Deploy 3.0

I have followed the instructions here:-

http://www.iis.net/learn/web-hosting/joining-the-web-hosting-gallery/configure-site-for-web-deploy-publishing

Yet from web matrix, I still can't connect to my IIS site. I just get Unable to Establish Connection' when validating the site settings (which I have imported from the file generated by web deploy on the IIS server). I have been trying to fix this for 2 days, surely this can't be that difficult.

I have checked and I can telnet to port 8172 from the web matrix machine. There is no firewall in between and windows firewall is turned off on both machines.

stumped :(