<cryptography > settings element breaks in WSE SP2 or SP3

[EP]

I have a WSE server app that uses the <cryptography > element in the
configuration (seen below). This worked perfectly in WSE sp1, but when I
upgraded to SP2 and then to SP3, I get the following soap fault from any WSE
web service call. I know there is not a problem with the config file, it
worked in sp1 and it is correct according to the sp3 documentation. What is
happening here?

System.Web.Serv ices.Protocols. SoapHeaderExcep tion: Server unavailable,
please try later ---> System.Configur ation.Configura tionException: WSE032:
There was an error loading the microsoft.web.s ervices2 configuration
section. ---> System.Configur ation.Configura tionException: WSE028: An
unrecognized configuration element was found: cryptography.

<microsoft.web. services2>
<security>
<cryptography >
<encryptionForm atters>
<add uri="urn:myEncr yptionFormatter :algUri:1"
type="MyLibrary .MyEncryptionFo rmatter, MyLibrary, Version=1.0.2.0 ,
Culture=neutral , PublicKeyToken= xxxx"
/>
</encryptionForma tters>
</cryptography>
</security>
<diagnostics />
</microsoft.web.s ervices2>