'compilerVersion' attribute in the provider options must be 'v4.0' or later

Getting this error:

The value for the 'compilerVersion' attribute in the provider options must be 'v4.0' or later if you are compiling for version 4.0 or later of the .NET Framework. To compile this Web application for version 3.5 or earlier of the .NET Framework, remove the 'targetFramework' attribute from the element of the Web.config file.

It was working on our dev system, and we are now deploying to QA using an xcopy type deploy.

We don't have a "compilerVersion" anywhere in the web.config, and the targetFramework is set to "4.0". We have done an IISReset.

<system.web>

        <compilation debug="true" targetFramework="4.0">
        <assemblies>
            <add assembly="System.Data.Linq, Version=4.0.0.0, Culture=neutral, PublicKeyToken=B77A5C561934E089"/>
            <add assembly="System.Design, Version=4.0.0.0, Culture=neutral, PublicKeyToken=B03F5F7F11D50A3A"/>
            <add assembly="System.Web.Extensions.Design, Version=4.0.0.0, Culture=neutral, PublicKeyToken=31BF3856AD364E35"/>
            <add assembly="System.Windows.Forms, Version=4.0.0.0, Culture=neutral, PublicKeyToken=B77A5C561934E089"/>
        </assemblies>
    </compilation>

UPDATE 2: when we removed the entire section, we got past the error. So my question is, what is wrong with leaving in this section if we are on .NET 4.0?

We just did a full xcopy of exactly what was in Test to QA, and in QA it gets the error and DEV doesn't. So the software and configs are identical. Why would it work on one server and not another? IIS options seem to be identical.

taken from: http://www.asp.net/whitepapers/aspnet4/breaking-changes#0.1__Toc256770150

you should go to your server root web.config and include the whole <system.codedom>...</system.codedom> tag content into a <location path="" inheritInChildApplications="false">...</location> tag

Possible solution here - asp.net/whitepapers/aspnet4/breaking-changes#0.1__Toc256770150

After fighting with this for a while, I ended up creating a new IIS site using a different port and adding my ASP.Net 3.5 application to the new site and it is working perfectly.

I got the same error and found out that my v4.0 website was hosted under the default website that was v2.0. If you've such setup then you need to remove the following line from your web.config:

<compilation defaultLanguage="c#" debug="true" targetFramework="4.0"/>

I hope that helps.