If you are going to use existing service
When you build the service turn off compute output pixel properties in the build option dialog box
ImageService --> Advance --> Build
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In your case you are building the service again use the following steps
1. create a service ( elevation) use advance option ot create the service
2. from advance use add raster ( elevation -- if you have .adf file use binary grid or if you have .asc file use ascii option)
3. Build the service ( check on these option - compute pixel size ranges, build boundary, load preview)