Created Issue: UpdatePanel not known element [27122]

Hi Guys
Today I installed the AjaxToolKit to a website (not web application) and immediately VS2010 is giving an error: Element 'UpdatePanel' is not a known element. Haven't noticed any other controls not working as yet

Hours laters running through forums I have done several things:
I have emptied the ReflectedSchemas folder
Unistalled and reinstalled AjaxToolKit
Added Register code to UserControl
Re-Added reference to System.Web.Extensions plus a multitude of other things

I am using DotNetNuke so cannot build application.
Framework 4.0

It was working before I installed and those UpdatePanels in place before are fine.

Any clues cause im stumped