Not sure how this could happen, as the version of RadControls for Silverlight distributed with the internal build is 2012.2.823.1040 (located in C:\Reporting_install_folder\Examples\CSharp\SilverlightDemo\bin). Checked on two different machines just to make sure I'm not mistaken. Can you check the version of Telerik.Reporting.dll in the internal build and let me know what version it is?
Still I just tested with the exact version you have reported 2012.2.725.1040 and the report viewer functions without any errors.
If you continue to have problems, please provide us with a runnable sample project in official support ticket and we would advise you once we review it.
the Telerik team
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