RadPane or RadSlidingPane cannot be directly updated with RadAjaxManager. If you need to update the content of a pane using RadAjaxManager you need to add an asp:panel inside the pane and then update this panel.
For your convenience I have attached a sample page demonstrating how to display the loading panel over the pane. In the button click click handler I have added the following code to simulate longer loading time.
All the best,
the Telerik team
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