Not able to connect to TFS Server from TFS Proxy

In our office we have setup TFS for project development. The TFS Server is WIN 2003 server SP2 with VSTFS 2008 and is running fine. Now we need to setup a TFS Proxy server on client site for client to access. Before going for the client setup, I wanted to build and test proxy in our office on a dummy server (will call it Proxy server hereon) by keeping it on a different domain. OS configuration of the Proxy server is the same as TFS server. I have installed and configured TFS proxy on Proxy server to connect to TFS Server. Also we have built trust between the two different domains to enable communication. Now problem is that I am not able to at all connect to TFS server. I am trying to connect from Internet Explorer of proxy server using proxy service account. It gives me error: The page cannot be displayed. HTTP 500 - Internal server error. The page I was browsing was http://tfs:8080/VersionControl/v1.0/ProxyStatistics.asmx.

I think I have done all the required steps correctly to configure proxy as described in MSDN and also TFS installation guide. Here Proxy service account is a member of ‘Team Foundation Valid Users’ group. I am able to connect to TFS Server (specifying port) using Telnet from command prompt on proxy server as suggested by few sites. The TFS server web sites have been configured to use Integration Windows Authentication. Even开发者_如何学Got Logs on both the servers are also not giving any error. Overall I’m not able to get it done.

Any ideas on what might be the problem???

I think the port number for accessing the proxy server is 8081. I also do not know why you need to install the proxy server on the the client side. You only need the VS200x on the client side I assume but check on http://msdn.microsoft.com/en-us/library/ms252490(VS.80).aspx?ppud=4