If the file is local, just use the file URI scheme:
file://host/path/file.wsdl
If this doesn't work, check if the security sandbox features are blocking it.
In AIR apps, in order to access files in the application's temporary storage directory or the application's own directory, you need to use special app:
or app-storage:
URL schemes, though.
Like dirkgently said, you can always embed the file into the application, but as far as I know, you then won't be able to modify it afterwards in a persistent manner since it's not just a file in the filesystem. Probably the best option for you is to embed this file and if you later need to update it, have the app save an updated version into the File.applicationStorageDirectory
(which you would then always check first before using the default embedded version.) Although I have no idea if using embedded XML files with the WebService classes is even possible.
See this article for info on how to embed external XML files into your app. This is how I've done it:
// note: common sense says that the mimeType should be "text/xml" here but
// it doesn't work -- this does, though. who knows why.
[Embed(source="File.xml", mimeType="application/octet-stream")]
private const _fileXMLClass:Class;
private var _fileXML:XML = XML(new _fileXMLClass());