In my case, the problem seems to be related to what .Net 4 installed earlier to add IIS as a function for Windows 7.
A colleague and I fixed the problem by opening a command prompt with an elevated (Run As Administrator). Then the following was done:
cd C:\Windows\Microsoft.NET\Framework64\v4.0.30319 aspnet_regiis.exe -i
Hope this helps someone!
killercowuk
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