According to the following link:
http://www.thescripts.com/forum/thread176050.html
You have to rewind the stream.
public static string Process(Stream waveRunnerMessage)
{
XmlDocument requestDoc = new XmlDocument();
XmlDocument responseDoc = new XmlDocument();
// attempt to load the request as an xml document
wareRunnerMessage.Position = 0;
requestDoc.Load(waveRunnerMessage);
//######### ERROR HERE #######
}