How are you trying to retrieve/open this web application?
Is 192.168.0.161 your IP address? It almost sounds like the creator of the project used their IP address as the web address of the project instead of using "localhost". So when you are trying to load the project, it's not going to your local machine, but attempting to go to their machine, which may or may not be accessible or be denying you access. Either way, it should be set up so that the project's web location is
http://localhost/WebApplication3. The other thing I noticed is that there is a space in the application name. This could also be causing problems.
Unfortunately, changing an existing project is a bit of a headache. It need to be recreated the correct way before you can get it to work.