Out of the blue today I started getting this error in Visual Studio 2008 when I go to compile a website, compiling a class library is no issue. My project is based in ASP.NET 3.5 and another in 2.0
Unable to load DLL 'webengine.dll': The specified module could not be found. (Exception from HRESULT: 0x8007007E)
I've tried uninstalling, reinstall .NET versions, service packs, etc... nothing in my searches have helped me.
Well after a day of frustration I figured out how to recover from this error. I have no idea why it happened, as I was fine at the end of the day yesterday and hosed at the beginning of the day today.
But I had to completely, and I stress completely, uninstall .NET. The normal uninstall leaves remnants of the install. However this page gives you a tool to completely uninstall .NET:
http://blogs.msdn.com/astebner/pages/8904493.aspx
After uninstalling .NET it will force you to reboot. Then go into your windows\microsoft.net folder and delete (or rename) the framework folder. Finally, re-install .NET and the error will hopefully be gone for you as well.