"Are you missing an assembly reference?" compile error - Visual Studio

In my case it was a project defined using Target Framework: ".NET Framework 4.0 Client Profile " that tried to reference dll projects defined using Target Framework: ".NET Framework 4.0".

Once I changed the project settings to use Target Framework: ".NET Framework 4.0" everything was built nicely.

Right Click the project->Properties->Application->Target Framework

Right-click the assembly reference in the solution explorer, properties, disable the "Specific Version" option.