I discussed this with our engineers.
Here's what we think is happening: you're trying to invoke the test through a Windows service. A service does not have interactive desktop permissions.
Instead you should use the RunHelper class to invoke your tests through MsTest. Invoking the test might look something like this:
Check out the ArtOfTest.WebAii.Design.Execution.RunHelper and try to invoke the test through it. Let me know how it goes.
the Telerik team