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
There is a bug open to tweak the DTF supportedRuntime element in its manifest to support NETFX 4.0. That bug hasn't been fixed yet so you need still to do it yourself.