The HTTP 401 error is at the IIS level. Check in IIS for the directory security on the Web Service virtual directory. The easiest fix is to allow anonymous. Otherwise set the Biztalk send port to have matching security Basic or NTLM with appropriate credentials.
I have now solved the problem I had with the 405 error, but this is now the error I get: error: The remote server returned an error: (401) Unauthorized.
I searched it up and the suggestion is to go into the biztalk admin console and changes the security settings under the send port's properties box. The problem I have now is that when I right click on the send port there is no properties tab listed. How do I change the send ports security setting to NTLM?