The value for the 'compilerVersion' attribute in the provider options must be 'v4.0' or later

While moving my ASP.Net application from Windows 2003 server to Windows 2008 R2 server I ran into following exception when I tried to access the application.

Well this took me by surprise a little because this application has been working for over a year on Windows 2003 server. I remembered that since this was child application under parent DNN portal, I had to add following entry in web.config. From being a child application means that my application was configured as another web application under DNN web application.

<location path="" inheritInChildApplications="false" >

So my first thought based on the exception details was that probably by mistake somebody removed that entry. Well that was not the case. Then I checked the application pool for parent as well as child application. They both were configured to use application pool that was using .Net 4.0 with classic pipe line. Then I looked at compiler options in my child application. It was set as follows and nothing seemed to be wrong here as well.

<compilation debug="true" targetFramework="4.0" />

Only place left was to check in parent application. After digging through million entries in DNN web.config file, I found the following that had compiler option set to V3.5.

<compiler language="vb;vbs;visualbasic;vbscript" 
type="Microsoft.VisualBasic.VBCodeProvider, System, Version=2.0.0.0, 
Culture=neutral, PublicKeyToken=b77a5c561934e089" extension=".vb" warningLevel="4">
   <providerOption name="CompilerVersion" value="v3.5" />
   <providerOption name="OptionInfer" value="true" />
   <providerOption name="WarnAsError" value="false" />
</compiler>
<compiler language="c#;cs;csharp" 
extension=".cs" type="Microsoft.CSharp.CSharpCodeProvider,System, 
Version=2.0.0.0, Culture=neutral, PublicKeyToken=b77a5c561934e089" warningLevel="4">
   <providerOption name="CompilerVersion" value="v3.5" />
   <providerOption name="WarnAsError" value="false" />
</compiler>

After I changed the compiler version to V4.0, my application was happy as a pie! Here is link to Microsoft document on breaking changes that describes this issue in more detail.