From the ASP.NET 2 it is possible to upload the site to your hosting without even compiling it. Then your site will be compiled on a initial request using a compiler settings as seen in your web.config. If you have pre-compiled your site but still have the code in the
App_code folder then those settings will be used to compile the code.
I think the go-daddy disabled the compiling on their servers so malicious code can not be inserted and compiled or executed.
As long as you are not using your
App_code folder and you have pre-compiled your website then you can delete your
web.config section that you have mentioned.
On the server change the Asp.net settings. There is the option for Trust Level. Just try to set it to the "Full".
This will surely solve your error.