*** NEVER MIND ***
I downloaded and installed Telerik-OpenAccess-ORM-trial-2010.2.1013.8.zip
and it works now.
I'm using version v2.0.50727 (2010.2.714.1) is this later or older than the version you're referencing because I'm still getting this error.
I removed several tables from my DB and then updated the diagram from it and it won't let me remove them from the diagram - I get this error message.
Also - if I rename a field in the DB then update the database, it does not update my diagram. Instead it leaves the old field (unmapped) and adds the new fields.