Based on the provided information it is hard to determine the exact cause of the issue you are facing.
However, you could try using our RadAjax instead of UpdatePanel and see if the issue still persists. For more information, please review this help article:
RadCodeBlock and RadScriptBlock
If the issue still persist, I suggest you isolate a stripped working version of your project and send it enclosed to a formal support ticket. I will examine it in detail and will get back to you with my findings.
the Telerik team