Hi,
Just delete any dlls it complains about from the /bin folder
Some files are only included in the.NET 4 package, but downgrading did not remove them.
You can probably qualify to get VS 2010 free via the Microsoft Website Spark program. When .NET 4.5 ships later this year we will probably drop support for .NET 3.5, also there are medium trust problems under .NET 3.5 that affect design and skinning. .NET 4 works better.
Hope that helps,
Joe