>I resolved this by creating an application exe config file:
>
>

><?xml version="1.0"?>
><configuration>
>   <startup useLegacyV2RuntimeActivationPolicy="true">
>      <supportedRuntime version="v4.0" sku=".NETFramework,Version=v4.0"/>
>      <requiredRuntime version="v4.0.20506" />
>   </startup>
></configuration>
>

>
>I still do not know, however, why this was necessary as the application does not have any reference to the old version.

Although your projects may all target 4.0 it's possible that one (or more) may be referencing components using an older version.
Building the projects individually might give you a clue.
Probably not worth trying to track them down tho........