Fiddler is not designed for service use; you typically should consider building a FiddlerCore-based application instead. This ensures that your code fully controls the UI and you don't end up in a situation where the service is deadlocked on some UI that cannot be responded to.
Having said that, when running from the service account, Fiddler looks for its CustomRules.js file in the service account's
\Documents\Fiddler2\Scripts folder, not your account'
s folder. So you'll need to copy the script to the correct folder.
Check out the Telerik Platform - the only platform that combines a rich set of UI tools with powerful cloud services to develop web, hybrid and native mobile apps.