How to fix: Version mismatch. BAML stream has version number '0.96' but parser can read only version '0.94'.

After you uninstall .Net 3.0 runtime, windows sdk and orcas, you ran the uninstall utility, which should work in most cases. If it does not, uninstall everything again and run the uninstall utility again.

After all this, reboot and check folder C:\Program Files\Reference Assemblies\Microsoft. If there are any folders or files in this folder, then manually removed them. After you restart your PC; only install the .Net 3.0 Runtime. Verify that it works first before proceeding with the install of the SDK and Orcas. You should be able to verify that the runtime is installed correctly if you go to http://xaml.net/ and click on the Snowboarder image. The image will load a xaml page with an animated snowboarder. If this works, proceed with the install of SDK and Ocras.