If you have successfully installed an app running MVC 2 on Azure, and then try to upgrade it to MVC 3, you might run into some troubles.
What might help is to ensure that you have also deployed the new assemblies. MVC 2 is part of .NET 4.0, and its assemblies are included in the standard Azure image, but the new ones aren’t. You have to deploy them yourself.
They won’t get deployed by default because they are in the GAC.
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