C# – Visual Studio 2010 Can no longer build .NET v3.5

I have a 2010 project that is targeting .NET v3.5. Inexplicably I can no longer build v3.5 projects. The project doesn't have ANY references added. It won't even let me add a reference to System.Core as it is added by the 'build system'.

warning CS1685: The predefined type 'System.Func' is defined in
multiple assemblies in the global
alias; using definition from
'c:\Windows\Microsoft.NET\Framework\v4.0.30319\mscorlib.dll'

IFilter.cs(82,49): error CS0433: The type 'System.Func'
exists in both 'c:\Program Files
(x86)\Reference
Assemblies\Microsoft\Framework\v3.5\System.Core.dll'
and
'c:\Windows\Microsoft.NET\Framework\v4.0.30319\mscorlib.dll'

Looks like something is grabbing onto 4.0 but I'm not quite sure how to fix it. Any one else run into this?

Coworker had this same issue. It took a reinstall of Windows to correct the problem

I've opened a bug on this one: https://connect.microsoft.com/VisualStudio/feedback/details/558245/warning-cs1685-when-compiling-a-v3-5-net-application-in-visual-studio-2010

If the compiler is set to verbose I see this:

FrameworkPathOverride =
C:\Windows\Microsoft.NET\Framework\v4.0.30319

which is defined as:

Specifies the location of mscorlib.dll
and microsoft.visualbasic.dll. This
parameter is equivalent to the
/sdkpath switch of the vbc.exe
compiler.

Some other interesting tidbits: I've created a new project all together and cannot build v3.5 at all. I can build 2.0, 3.0, 3.5 Client Profile, 4.0 and 4.0 Client Profile with no problem. VB.NET can build v3.5 but C# cannot. I've tried a reinstall of .NET 3.5, 4.0 and Visual Studio 2010 with no success. Visual Studio debug logs shown nothing interesting and Safe Mode does not work.

Trying to avoid a Windows reinstall…

EDIT: I've come to realize others are facing this issue as well. Link, Link, Link

Reinstalled several times. Visual Studio uninstalls do not clean up after themselves. I've spun up a VM to develop on until I have a chance to reinstall my main OS.