I'm not sure why could this behavior occur.
I just prepared a small website, using the code you sent us. Can you please, extract it locally and load it in design mode in your IDE?
If it renders correctly, that might mean that there is some code in the user control initialization, that throws the error.
Otherwize that might mean that the problem is caused by the machine setup regarding the RadControls assembly location.
Let me know the results so that I can help further.
P.S. Please note, as this is a public forum, the test application I'm sending hereby contains the trial assemblies. To use the dev ones, please, replace them with the ones from your distribution.
the Telerik team