WIX Custom Actions built for .Net Framework 4.0 does not work? Ways to resolve?

Question

We were using WIX 3.5 (Build Number 1811) and built a custom action built using Visual Studio 2008 and with target framework as .Net 3.5. This used to work great, until we b

Answer 1

Well we finally resolved the problem, we had to set:

useLegacyV2RuntimeActivationPolicy="true"
and
have both versions specified:

and

If just " is specified, it does not work. So looks like a bug in WIX 3.5 Beta