Error 1 The "ValidateXaml" task failed unexpectedly.
System.IO.FileLoadException: Could not load file or assembly 'file:///C:\.....\build\Telerik\Telerik.Windows.Controls.GridView.dll' or one of its dependencies. Operation is not supported. (Exception from HRESULT: 0x80131515)
File name: 'file:///C:\.......\build\Telerik\Telerik.Windows.Controls.GridView.dll' ---> System.NotSupportedException: An attempt was made to load an assembly from a network location which would have caused the assembly to be sandboxed in previous versions of the .NET Framework. This release of the .NET Framework does not enable CAS policy by default, so this load may be dangerous. If this load is not intended to sandbox the assembly, please enable the loadFromRemoteSources switch. See http://go.microsoft.com/fwlink/?LinkId=155569 for more information.
at System.Reflection.RuntimeAssembly._nLoad(AssemblyName fileName, String codeBase, Evidence assemblySecurity, RuntimeAssembly locationHint, StackCrawlMark& stackMark, Boolean throwOnFileNotFound, Boolean forIntrospection, Boolean suppressSecurityChecks)
at System.Reflection.RuntimeAssembly.nLoad(AssemblyName fileName, String codeBase, Evidence assemblySecurity, RuntimeAssembly locationHint, StackCrawlMark& stackMark, Boolean throwOnFileNotFound, Boolean forIntrospection, Boolean suppressSecurityChecks)
at System.Reflection.RuntimeAssembly.InternalLoadAssemblyName(AssemblyName assemblyRef, Evidence assemblySecurity, StackCrawlMark& stackMark, Boolean forIntrospection, Boolean suppressSecurityChecks)
at System.Reflection.RuntimeAssembly.InternalLoadFrom(String assemblyFile, Evidence securityEvidence, Byte[] hashValue, AssemblyHashAlgorithm hashAlgorithm, Boolean forIntrospection, Boolean suppressSecurityChecks, StackCrawlMark& stackMark)
at System.Reflection.Assembly.LoadFrom(String assemblyFile)
at Microsoft.Silverlight.Build.Tasks.ValidateXaml.XamlValidator.Execute(ITask task)
at Microsoft.Silverlight.Build.Tasks.ValidateXaml.XamlValidator.Execute(ITask task)
at Microsoft.Silverlight.Build.Tasks.ValidateXaml.Execute()
at Microsoft.Build.BackEnd.TaskExecutionHost.Microsoft.Build.BackEnd.ITaskExecutionHost.Execute()
at Microsoft.Build.BackEnd.TaskBuilder.ExecuteInstantiatedTask(ITaskExecutionHost taskExecutionHost, TaskLoggingContext taskLoggingContext, TaskHost taskHost, ItemBucket bucket, TaskExecutionMode howToExecuteTask, Boolean& taskResult)
Infovisa.Colosso.Web
It turns out that Windows 7 / NTFS treats these newly unzipped files as being from a different security zone. If I right click on one of the files I find that there is a button and details on the general tab that I have never seen. Ultimately it reads something like Windows is blocking a file from another computer. Windows 7 provides an "unblock" button, but I wasn't inclined to click on it for every single file.
To solve this problem I moved all of the files from radcontrols_for_silverlight_3_2010_2_0714_dev_hotfix.zip onto a flash drive ( which is FAT formatted ) and then from that flash drive into my normal directory for telerik .dlls.
I hope this helps someone else.