Cannot edit a record in People (DirPerson). An update conflict occurred due to another user process deleting the record or changing one or more of fields in the record.

I'm getting this error when I try to create a new customer from an AIF document web service. This was working before we upgraded to R2.

Here is my C# code that I am using to call the web service:

               MyService.AxdEntity_CustTable customer = new MyService.AxdEntity_CustTable();

                //
                MyService.AxdEntity_DirPartyPostalAddressView postalAddress = new MyService.AxdEntity_DirPartyPostalAddressView();
                postalAddress.Street = "123 Anystreet";
                postalAddress.City = "Anytown";
                postalAddress.State = "TX";
                postalAddress.ZipCode = "79999";
                postalAddress.CountryRegionId = "USA";
                postalAddress.StreetNumber = "123";
                postalAddress.RecIdSpecified = false;
                postalAddress.Roles = "Invoice";

                MyService.AxdEntity_DirParty_DirPerson dirParty = new MyService.AxdEntity_DirParty_DirPerson();

                dirParty.DirPartyPostalAddressView = new MyService.AxdEntity_DirPartyPostalAddressView[] { postalAddress };
                dirParty.PersonName = new MyService.AxdEntity_PersonName[] { new MyService.AxdEntity_PersonName() { FirstName = "MySecond", MiddleName = "Test", LastName = "Person" } };

                MyService.AxdEntity_DirPartyContactInfoView emailInfo = new MyService.AxdEntity_DirPartyContactInfoView();
                emailInfo.Type = MyService.AxdEnum_LogisticsElectronicAddressMethodType.Email;
                emailInfo.Roles = "Invoice";
                emailInfo.Locator = "anybody@mail.org";
                emailInfo.IsPrimary = MyService.AxdEnum_NoYes.No;
                emailInfo.LocatorExtension = "";
                emailInfo.LocationName = "Primary Email";

                MyService.AxdEntity_DirPartyContactInfoView phoneInfo = new MyService.AxdEntity_DirPartyContactInfoView();
                phoneInfo.Type = MyService.AxdEnum_LogisticsElectronicAddressMethodType.Phone;
                phoneInfo.Roles = "Invoice";
                phoneInfo.Locator = "800-867-5309";
                phoneInfo.IsPrimary = MyService.AxdEnum_NoYes.Yes;
                phoneInfo.LocatorExtension = "456";
                phoneInfo.LocationName = "Primary Phone";

                dirParty.DirPartyContactInfoView = new MyService.AxdEntity_DirPartyContactInfoView[] { emailInfo, phoneInfo };

                customer.DirParty = new MyService.AxdEntity_DirParty_DirPerson[] { dirParty };

                customer.action = MyService.AxdEnum_AxdEntityAction.create;
                customer.SuppItemGroupId = "Retail";
                customer.CustGroup = "Retail";
                customer.LineDisc = "Retail";
               
                MyService.AxdEntity_CustTable[] cust = new MyService.AxdEntity_CustTable[] { customer };

                MyService.EntityKey[] keys = client.create(context, cust);

                foreach (MyService.EntityKey key in keys)
                {
                    MessageBox.Show("New Customer completed.... Field = " + key.KeyData[0].Field + "; Value = " + key.KeyData[0].Value);
                }