I am not sure if you are still having this issue or not but i was having the same issue as well.
I was able to find the solutions here
https://stackoverflow.com/questions/6496223/compilation-error-in-net-4-0-web-config-linq-not-found
<add assembly="System.Core, Version=4.0.0.0, Culture=neutral, PublicKeyToken=B77A5C561934E089"/>
<add assembly="System.Data.DataSetExtensions, Version=4.0.0.0, Culture=neutral, PublicKeyToken=B77A5C561934E089"/>
<add assembly="System.Xml.Linq, Version=4.0.0.0, Culture=neutral, PublicKeyToken=B77A5C561934E089"/>
I hope this helps..