This might be a bug in the new (managed) debug engine that ships with Visual Studio 2013. Try turning on Managed Compatibility Mode (which effectively turns it into pre-2013 debug engine), located under Tools - Options - Debugging:
If this solves the issue, then I'd suggest trying to reproduce it with a small project, and then reporting it on Connect, so it could be fixed.
@bjhuffine comments below that there are other ways to enable compatibility mode, without globally disabling it (e.g. per-project). More information here: https://devblogs.microsoft.com/devops/switching-to-managed-compatibility-mode-in-visual-studio-2013/
According to question "Internal error in the expression evaluator" 'Use Managed Compatibility Mode' stops "Edit & Continue". Try to check "Use the legacy C# and VB expression evaluators" option under Tools - Options - Debugging.
I tried Igal's answer, and it did not work for me, but I found a solution that worked for me. I cleared the Watch and started to add items again. I noticed that if I tried to add item which was not inside current sub or function then an internal error occurred.
I solved the problem by adding other items from inside their subs or functions and there were no errors again.
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