Not sure about other issues that might cause this, but I didn't know that Wix was not installed with ms build.
I tried to create a project that was sitting on our build server and ran into this problem.
You need to first download and install it from http://wix.sourceforge.net/ .
Another widely used package are the MSBuild community tasks available from
https://github.com/loresoft/msbuildtasks
The latest stable release can be downloaded from a bit called nightly builds!
This will give a similar error message.
Jonny leeds
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