The server sent a response which SharePoint Designer could not parse

This error occours, when you open the default.master page using SharePoint Designer 2007, then the problem would be in your web.config file
ie.

The key problem  is  <remove verb="*" path="*.asmx" />. So remove this line and put it next to <remove verb="GET,HEAD,POST" path="*" /> this line.

So, final code should be looks like below one..

All the Best!!!