Yes, that definately breaks the application.
I have already changed my services.xml to take care of this issue.
The problem mentioned in my post seems to be related to STAX and SOAP
parsing?
I tried woodstox as well but I get similar error.
Have anything changed in terms of handling SOAP
If you are using services.xml look at this link.
http://xfire.codehaus.org/services.xml+Reference
--SNIP--
Spring 2.x support
Because of Spring 2.x new feature, services.xml default namespace must
not be declared on the root element of configuration ( beans ) and need
to be moved to service
