Is it possible, that there is another Sitefinity Web Site connected to the same database? Exactly such scenario could cause this error.
When initializing the CMS provider, it synchronizes the templates in the database with the .master files in the ~/App_Master folder. If there are new .master files, the provider will create templates for them in the database table. If there is a template record in the database, but the corresponding .maser file is missing and there are no controls added to the template and no pages which are using it, that record will be deleted from the database.
For example the following scenario could cause this error:
1. You have 2 sites pointing to the same database: Site 1 (not started) and Site 2(not started);
2. You start Site 1 and upload a new template .master file (you still haven't added controls to it, and no pages are using it).
3. Someone else starts Site 2, and on initializing the CmsProvider removes the record for the new template from the database, because the corresponding .master file does not exist in the Site 2/App_Master folder.
4. Then, when you go to select or edit the template, you get this error.
Please let us know your case is different.
the Telerik team