I apologize for the delayed answer. We tried to reproduce the problem with the latest version of RadControls and with your exact steps, but we were unable to get the exceptions you are getting. We had similar problem, but I believe that we fixed it in the last update of the suite on 17th November. If you are using earlier assemblies, most probably you will get this problem.
Could you please send us the exact version of your expression Blend and the creation dates of the files of our assemblies that you are using (Telerik.Windows.Controls.dll, Telerik.Windows.Data.dll and Telerik.Windows.Controls.Navigation.dll)? This will help us find your problem and solve it.
the Telerik team
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