When doing an item Fulfillment via Web Services for Lot Numbered Inventory items, one of the key information that needs to be specified is that of the issueinventorynumber.
There are times when one may encounter an error stating "Invalid issueinventorynumber reference key x" where 'x' is the internal ID of the inventory number record.
In this scenario, one must first verify if the internal ID specified is correct. You can do so by doing the following:
1) go to the Item record > Inventory Detail subtab
2) view the desired inventory number record by clicking its corresponding link on the Number column or by clicking the Edit link beside it
3) on the URL, look for the number set in the id parameter
If the internal ID of the inventory number record itself is verified to be correct, then check if the location being set on the request corresponds to the number record's location. You can check this again by going to the Item record > Inventory Detail subtab.