I have managed to get the following working:
var transactions = from t in context.Transactions
group t.Create_Date_Time by t.Participation
Most likely t1.Key and i1.Key are different types. The anonymous types must have exactly the same property names and types, declared in the same order for you to be able to union them.
As a side note, you probably also want to change this line of your code:
transactions.Union(cases);
to this:
var unionedQuery = transactions.Union(cases);
otherwise it won't perform the union, because you've not stored the resulting query.