I managed to reproduce your problem. I have 2 suggestions:
1. Add our DLLs to the references and before adding anything in the XAML try build the project.
2. Do you have Microsoft Silverlight 4 Tools for Visual Studio 2010
installed on your PC. You can check in your Programs and Features. I tested on two machines one have only the SL4 SDK
and Developers Runtime
and the issue doesn't occur there. The test PC on which I was able to reproduce the issue except for this two have the Microsoft Silverlight 4 Tools for Visual Studio 2010
installed. After removing it the issue disappears. We will try to investigate further what exactly is the cause.
Please, let me know how it goes and thank you for your report.
the Telerik team