I am facing this problem when I try to publish my web application on Windows Azure via Visual Studio 2010. I am trying by right click on project and select publish and importing
When you are trying to publish your web application from VS2010 to Windows Azure Websites, the publish process connect to Windows Azure Websites on specific port which is enabled for Web Deploy service. In VS 2010 if the connection to this service port is failed then VS return error as "Web Deploy is installed........ on remote server. The fact is that the WebDeploy service is already running and other machines could connect to the same server and deploy the problem is specific to your network and your machine.
There are two main place to look for 1) your deployment machine firewall 2) Proxy server if you are behind proxy. Try to change the network related settings locally so you can get it working.