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

Additionally to the solution from Ngm we had to set the target framework of the managed custom action class library back to .NET 2.0 to get things working.