"The type initializer for 'Microsoft.Web.Deployment.DeploymentManager' threw an exception" error with VS2010 WebDeploy 3.5

"The type initializer for 'Microsoft.Web.Deployment.DeploymentManager'
threw an exception" error with VS2010 WebDeploy 3.5

I'm deploying a new web app project through VS2010 using WebDeploy 3.5
onto a remote dev server. I have managed to publish another web app
project to the site root using the same method. However, now I wanted my
new web app to go as an (in IIS term) "Application". However VS2010's
Publish dialog keeps on giving me the error "Web deployment task failed.
(The type initializer for 'Microsoft.Web.Deployment.DeploymentManager'
threw an exception.)". And I could not figure out what I am doing wrong.
My Publishing Profile looks exactly the same as the one I used for
publishing my other wep app project, except for the Site/Application. I
also tried importing the publishing profile from my IIS dev server. But
neither worked. I'm using the same VS2010 software to publish my second
web app project so it cannot be an issue on WebDeploy. I am using the same
network login which as publishing rights to the dev server. I've created
the Application on IIS7 and the folder sits within the same folder
hierarchy as the site root. Both the new web app project and the one I
successfully published earlier are MVC apps (which I do not think
matters).