Thank you for providing additional information.
Concerning the problem with not properly referenced assemblies.
1. Sitefinity is trying to load an old Telerik.Web.UI assembly Version=2010.2.826.40 which is old version and Sitefinity 4.2 uses the latest version of this assembly 2011.2.712.40. I suppose a user control is requiring it or the required version is hardcoded somewhere as required. Can you make a search for this version in your solution to see if you will find it somewhere. If you add the new assembly double check if it is in the bin folder of your project and the same assembly is referenced in the Visual Studio project.
Another thing that might be causing a problem is if you don`t have the latest version of the RadControls installed, they are available with Sitefinity 4.2 SDK
2. The menu is a RadControl and uses Telerik.Web.UI assembly. Can you make sure you have referenced the correct assembly.
the Telerik team
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