+1  A: 

The two issues you mentioned are almost certainly related. In both cases, the XAML file will be processed in order to create a control. One for design purposes and the other for runtime. If there is an exception being generated at runtime while parsing the file then it follows that the designer will also be having problems with the file.

I think you need to focus on the original bug and then come back to this one. One should almost certainly fix the other.

JaredPar
Thanks Jarad I'll keep investigating :-)
Jon Cage
A: 

Okay, so it turned out that although Visual Studio was set up to use v3.5 of the .net framework you need to seperately install v3.5 of the framework - it seems I only had v2 installed. Let this be a lesson for anyone else struggling with the same problems!

Jon Cage