TransformWebConfig is referenced via Microsoft.WebApplication.targets, which refers to Microsoft.Web.Publishing.targets, which contains the TransformWebConfig target you are after.
I do not know what the problem is with your project without looking at the project file. Do you mind attaching it? It might be worth checking to see if the project references version 10 of the Visual Studio WebApplication target:
<Import Project="$(MSBuildExtensionsPath32)\Microsoft\VisualStudio\v10.0\WebApplications\Microsoft.WebApplication.targets" />)
instead:
<Import Project="$(MSBuildExtensionsPath)\Microsoft\VisualStudio\v9.0\WebApplications\Microsoft.WebApplication.targets" />
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