I was working on creating some markup extensions and started to get very weird VS behaviours. I have extracted and pinpointed the issue in the separate solution. Problem is that VS can't create a CLR object in XAML.
Here it is:
<wpfApplication4:Dog x:Key="doggy" />
public partial class MainWindow : Window
public class Dog
Error 1 The name "Dog" does not exist in the namespace "clr-namespace:WpfApplication4". \\hopr1\folders$\vxk\Documents\Visual Studio 2012\Projects\WpfApplication4\MainWindow.xaml 6 9 WpfApplication4
Your solution is running on a network share. .Net (and Visual Studio) applications can run into permission / access issues when running on a network share.
Copy your solution to a local drive (with full trust) and you should be fine.
It is possible to get a network drive working with full trust - you can find answers for this on StackOverflow and other places - but in my experience I keep running into obstacles when I do this, so try to avoid it unless it's absolutely critical to the problem at hand.
E.g. this question gives instructions about how to do this:
I've only ever tried this with VS2010 so (as indicated in the link) you might have better joy with 2012.