SOLVED: I came across a similar problem. I had BR tags inside of SPAN tags. I changed the SPAN tags with DIV tags but it had no effect.
NOTE that I am using Kendo PDF Export and not RAD Grid but this should work for you too.
Then I compared this with a similar issue with another part of the page. The only difference was P tags. So I replaced my HTML:
and I don't see the error anymore.