I have a TeamCity install on x32 Server2008 windows machine. I\'ve run the .net 4.5 web install. I\'ve also copied over the files from my x64 machine based on this article
I seemed to solve this issue by going into the registry and deleting all entries for MSBuild that weren't for version 12, then restarted the agent.
To do that, go to Start > Run and type in Regedit
Then navigate to the key:
HKEY_LOCAL_MACHINE > SOFTWARE > Microsoft > MSBuild
Delete all versions except for 12.0.
Go down the next level to ToolsVersions and delete the non-12.0 versions there.