Although we are no longer accepting new API 1.1 registrations, the service is still up.
I'll assume that this is a C# application. If the application fails when creating a new proxy object, then there is an issue with the application. At this point no requests will have been made to the web service.
If you could provide us with a stack trace, we should be able to help you further.
Eric Carter - SDET - Webmaster Tools Team