I Think There are some reasons for this error:
1) Check whether the MySql.Data exist in the GAC (In Drive Name:\WINDOWS\assembly) or (the web service's bin folder) on the server.
2) You are missing this DLL. You should look at putting it in the bin directory of your application.
3) May be version conflict between the MySql client you want and what is installed on the server. You can add the following section to your web.config file and specify the proper version/public key :
<br />
<compilation debug="false"><br />
<assemblies><br />
<add assembly="MySql.Data, Version=5.2.7.0, Culture=neutral, PublicKeyToken=C5687FC88969C44D "/><br />
</assemblies><br />
</compilation><br />
<br />
try to re-installing the mysql-connector-net-5.2.7.0 on the IIS server to resolve the issue.
Please vote for answer (if it is useful).