I just had the exact same problem. I've copied the App_Master folder just as in the tutorial and got the same error.
To solve this I opened the Sitefinity project in Visual Studio and added the files I copied from SF3.7. I converted all ascx and master files to a Webaplication files (right click on the file and convert to web application)
Then I've fixed all build errors until the project succesfully build. I tried to migrate the project and again I got the same error. So I created a test page and use the first masterpage that fails as its template. This give me an ASP.NET exception on a AjaxControlToolkit control in the masterpage. I fixed this error and after this the migration succeeded.
I hope this will solve your problem as well.