We only use Java 6 so I don't think we have any Java 7 class files. I managed to get the application to run by removing the instantiation of our Web Service beans. So spring works fine; the problem is instantiating our web service beans.
I enabled the verbose diagnostic (see attached log file) and it seems that JET is having a problem with one of our web service methods. It compiles fine it seems, but when the application starts it throws a ClassFormatException.
We are using java version "1.6.0_29" where as JET is using update 27. I don't know if that can be a problem.