On loading the attached wsdl the operation name becomes corrupted and further on simulation the Web Service request becomes corrupted - the first parameter is overalping the operation.
Is there a configuration issue I am missing?

Could you clarify what you mean? You are getting an error when you load the WSDL? What do you mean by the operation name is corrupted? Also, what do you mean by "overlap" in simulation? Please post any error messages and traces here. It is difficult to diagnose otherwise. For the trace, make sure the showsoaptrace option, at least, is enabled in ddrt.properties.

the name of the calling method becomes [{http://siebel.com/CustomUI}fEMIBSHandleActivitiesHandleCall_1] - see lower case f instead of upper case and the web service request ;
Web Service Request -> <?xml version='1.0' encoding='utf-8'?><soapenv:Envelope xmlns:soapenv="http://schemas.xmlsoap.org/soap/envelope/"><soapenv:Body><ns1:Id xmlns:ns1="http://siebel.com/CustomUI"><ns1:IVRText></ns1:IVRText><ns1:Status></ns1:Status><ns1:EXT></ns1:EXT><ns1:IVRTextCount></ns1:IVRTextCount><ns1:UCID></ns1:UCID><ns1:DNIS></ns1:DNIS><ns1:AGENT></ns1:AGENT><ns1:AccountName></ns1:AccountName><ns1:SmartActivityId>1-QV8DE</ns1:SmartActivityId><ns1:SmartContactId></ns1:SmartContactId><ns1:SubArea></ns1:SubArea><ns1:DialedNumber></ns1:DialedNumber><ns1:ANI></ns1:ANI><ns1:Area></ns1:Area><ns1:EventType></ns1:EventType><ns1:SubStatus></ns1:SubStatus><ns1:Description></ns1:Description><ns1:IVRTextType></ns1:IVRTextType></ns1:Id></soapenv:Body></soapenv:Envelope>

Trace file is attached