AjaxControlToolkit requires ASP.NET Ajax 4.0 scripts
Try this:
Change
<asp:ScriptManager ID="scriptManager1" runat="server"></asp:ScriptManager>
to
<ajaxToolkit:ToolkitScriptManager ID="toolkitScriptManager1" runat="server"></ajaxToolkit:ToolkitScriptManager>
Check if this link helps you resolve your issue -
http://blog.thinkoriginally.com/2010/05/03/microsoft-jscript-runtime-error-ajaxcontroltoolkit-requires-asp-net-ajax-4-0-scripts/
EDIT: Check this link for dll load error resolution -
http://geekswithblogs.net/LessonsLearned/archive/2008/08/21/hidden-surprises-in-.net-3.5-service-pack-1.aspx
Try deleting Microsoft.ScriptManager.MSAjax.dll
in the bin folder..