Apologies for the misunderstanding with the "runnable" project - what we mean by saying runnable is to send us a project that is not dependent on databases/assemblies/etc that we do not have or if it is dependent to send us the respective databases/assemblies as well. In your case "runnable" would mean that without the issue you are experiencing the project would run, or in other words once we fix your issue locally the project would be runnable.
Also please have in mind that you are the first one that reports such a problem and we are not able to reproduce the issue locally. Because of that we would highly appreciate if you provide us with additional details about your setup or send us the solution with the projects.
Additionally from the error message it seems that you have not updated all the projects in the solution and some project might still be built against an older .NET framework. Please have in mind that you cannot reference projects and assemblies which target a higher framework than the current project - that is if your project targets .NET 2.0 you will not be able to add references to assemblies built against 4.0 for example.
the Telerik team
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