While you may not be able to change the long path to the file, there is a solution for you!
If you are like me, you probably created your build controller and then started to learn TFS Builds. So, you filled in the spaces something like this:

By default, this specifies the build path for accessing any custom assemblies your custom build process requires. If you do not have custom assemblies, you do not need this value.
To return to this dialog box, open the Team Foundation Administration Console on the build server and click Properties on the build controller. Just delete the path and your problem will disappear (or if you really have custom builds, point directly to this folder).
biscuit314
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