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Xamarin Studio on Windows appears to not use .NET/MSBuild to build Xamarin.Android Projects:
At least, that's the only reason I can think of that it would be using an $(MSBuildExtensionPath) of 'C:\Program Files\Mono-2.10.9\lib\mono\xbuild' (1540) or trying to use gmcs.bat for the compiler (1508).
Current hypothesis is that the "wrong" runtime is being used.
Please do the following:
1. Click Tools > Options...
2. In the left-hand tree, select Projects > .NET Runtimes
3. Please make sure that the Microsoft .NET entry is the default.
If Microsoft .NET is _not_ the default, please select it, click the Set as Default button, click OK, and restart Xamarin Studio.
Yes, in the linked trace they're using Mono, not .NET.
Today we have checked this issue with following builds:
X.S 4.0 - 1645b898271456799b70944c8b356ed6c5c00fdf
It is using .Net when build the project.
Changing the status to Verified.