The “Select a Master Page” option is only visible if you created a website project. To overcome this shortfall, choose Web Content Form instead of Web Form.

Repair the IIS mappings.
To do this, run the following command:

1) At the command prompt, type the following, and then press ENTER:
    “%windir%\Microsoft.NET\Framework\version\aspnet_regiis.exe -u”
2) Run “%windir%\Microsoft.NET\Framework\version\aspnet_regiis.exe -i”
3) Run “IISReset”

For more information:
http://support.microsoft.com/default…;EN-US;q306005
http://www.ironspeed.com/Designer/4.3.0/WebHelp/Part_VI/HTTP_Error_500_Page_Cannot_be_Displayed.htm