Unfortunately, there are problems with the Cider designer in Visual Studio 2008 where this type of error is all too common. The version in VS2010 is vastly improved, but that's no comfort when you hit this issue in VS2008.
I'm not sure what "Grapher2" is but you might check to make sure that there isn't code in its constructor that can't run correctly when the designer instantiates it. Something like a database call would be problematic.
I've seen similar issues.
This is only a partial solution as it won't render in the parent in design mode, but it'll get rid of the error. It's the best solution I've been able to find so far.
In the Constructor of your custom control.
if (!System.ComponentModel.DesignerProperties.GetIsInDesignMode(this))
InitializeComponent();
Hope that helps, or maybe it'll help you find a better solution. If you do please post it so I can use it ;)
Edit
I get a different error when not using the code above:
Could not create an instance of type ''
So may be a different issue then what I've seen, but sounds like it might be related.
I had a similar issue recently. Basically my understanding is that in designer some things happens in not exactly the same order as during run-time and some things that you would think could never be null actually are null during design-time.
I solved the problem this way: commented large parts of code in my control to the point there was no error in Cider and then uncommented them until I got the error again. Then when source of the error was localized, I surrounded problematic parts with
if (something != null)
{
...
}
Even when I felt that there's no way that could be null. And after some time I got rid of the error.
Not very "scientific" approach but it solved my problem. :)