The best solution I've found is to delete the TEMPORARY project from the directory: C:\WINDOWS\Microsoft.NET\Framework\v2.0.50727\Temporary ASP.NET Files.  This works a treat, and whenever I crash (which is when I get this error), I can rebuild in minutes - in fact, it works for any reference, not just the AJAX control toolkit.  Hope this helps someone else and saves them from pulling their hair out!