WIX Custom Actions built for .Net Framework 4.0 does not work? Ways to resolve?

Question

We were using WIX 3.5 (Build Number 1811) and built a custom action built using Visual Studio 2008 and with target framework as .Net 3.5. This used to work great, until we built the custom action using Visual Studio 2010 and with target framework as .Net 4.0.

WIX is unable to invoke the custom action, the error that we get is this:

  SFXCA: Extracting custom action to temporary directory: C:\Windows\Installer\MSI69BD.tmp-\
    SFXCA: Binding to CLR version v2.0.50727
    Calling custom action SomeCompany.SomeProduct.InstallerPlugin!SomeCompany.SomeProduct.InstallerPlugin.XYZProductCustomAction.ABCMethod
    Error: could not load custom action class SomeCompany.SomeProduct.InstallerPlugin.XYZProductCustomAction from assembly: SomeCompany.SomeProduct.InstallerPlugin

    System.BadImageFormatException: Could not load file or assembly 'SomeCompany.SomeProduct.InstallerPlugin' or one of its dependencies. This assembly is built by a runtime newer than the currently loaded runtime and cannot be loaded.

    File name: 'SomeCompany.SomeProduct.InstallerPlugin'
       at System.Reflection.Assembly._nLoad(AssemblyName fileName, String codeBase, Evidence assemblySecurity, Assembly locationHint, StackCrawlMark& stackMark, Boolean throwOnFileNotFound, Boolean forIntrospection)
       at System.Reflection.Assembly.nLoad(AssemblyName fileName, String codeBase, Evidence assemblySecurity, Assembly locationHint, StackCrawlMark& stackMark, Boolean throwOnFileNotFound, Boolean forIntrospection)
       at System.Reflection.Assembly.InternalLoad(AssemblyName assemblyRef, Evidence assemblySecurity, StackCrawlMark& stackMark, Boolean forIntrospection)
       at System.Reflection.Assembly.InternalLoad(String assemblyString, Evidence assemblySecurity, StackCrawlMark& stackMark, Boolean forIntrospection)
       at System.AppDomain.Load(String assemblyString)
       at Microsoft.Deployment.WindowsInstaller.CustomActionProxy.GetCustomActionMethod(Session session, String assemblyName, String className, String methodName)

Answer 1

Just my two cents:

Unlike Ngm I only had to add supportedRuntime for .NET 4.0

<?xml version="1.0" encoding="utf-8" ?>
<configuration>
  <startup useLegacyV2RuntimeActivationPolicy="true">
    <supportedRuntime version="v4.0" />
  </startup>
</configuration>

Important:

1. Don't rename CustomAction.config
2. Set the CustomAction.config Build Action to Content, else it won't work

Answer 2

Well we finally resolved the problem, we had to set:

useLegacyV2RuntimeActivationPolicy="true"
and
have both versions specified:
<supportedRuntime version="v2.0.50727"/>
and
<supportedRuntime version="v4.0"/>

If just "<supportedRuntime version="v4.0"/> is specified, it does not work. So looks like a bug in WIX 3.5 Beta