Permalinks problem on Windows server

Have the following problem: when I changed permalinks structure from default to ‘posts’ I got 500 Internal Error message. Then I created web.config file (my site runs on GoDaddy Windows server) with this code

<?xml version="1.0"?>

<configuration>

  <system.webServer>

    <rewrite>

      <rules>

        <rule name="Main Rule" stopProcessing="true">

          <match url=".*" />

          <conditions logicalGrouping="MatchAll">

            <add input="{REQUEST_FILENAME}" matchType="IsFile" negate="true" />

            <add input="{REQUEST_FILENAME}" matchType="IsDirectory" negate="true" />

          </conditions>

          <action type="Rewrite" url="index.php" />

        </rule>

      </rules>

    </rewrite>

  </system.webServer>

</configuration>

after that my site was back online. The problem is, that my site is single page and it works fine, but blog gives ‘Page not found’. On admin side I can do anything, except changing permalinks since it gives me 500 error and the whole admin side with website goes down. Checking web.config – it has some other code, so it overwrites itself and I can’t change permissions for web.comfig as it always 777.

Any suggestions what can I do here?