There is an issue with II7 (7.5 I think) where dll's from other sources (zones, like the internet) might have an added stream in the file properties that indicate their source. IIS7 then blocks those files until you release them if they are not from the local machine. This is a quick and dirty explanation and probably not all that technically correct.
Here's a website with more details:
The point is, go into your bin folder and right click on the telerik dll files and make sure that properties don't show that they are being blocked (i.e. unblock them.) The above page will get you more info.
I don't know if this issue is creating the 404 error but i seem to recall that i did get that error in some cases, even thought the page existed.
So this may not help you out but perhaps....
BTW - If you google streams and the sysinternals guys you can get some more info on the stream side of the issue. It's like adding extended attributes to files. One way to remove the streams is the sysinternals stream utility. Another way is to copy files to a std FAT drive which will strip the extra stuff since the 16 bit FAT format can't carry the extra stuff around.