The error message is still related to permssions - Access is denied.
Asp.Net tries to load the correct assembly, but setting up the assembly fails. Does NETWORK SERVICES user has write permission on the folder %windir%\Microsoft.NET\Framework\v2.0.50727\Temporary ASP.NET
Also, you can clear your ASP.NET temp folder
and try to run the application again.
All the best,
the Telerik team
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