Hi,
The installer does a simple registry check to see whether VS is installed, at the same time identifying its install path. It does so by reading the value: HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\VisualStudio\12.0\InstallDir (or its WOW64 equivalent).
To date I have not yet been able to reproduce the install problem in a development environment. Because the code involved is very straightforward and normal in an MSI, my belief is that this is being caused somehow by restricted access on the machine - perhaps 3rd party software blocking access to the registry or something similar.
It does look as though there is something interfering with your machine's ability to load the manually extracted DLLs from their install path. I recommend checking very thoroughly whether you've unblocked all of the files that were extracted (this is a crazy feature of Windows and it's very easy to miss a file). There is a useful post on stack overflow about a very similar sounding problem that may be worth a look -
http://stackoverflow.com/questions/8524423/could-not-load-file-or-assembly-hresult-0x80131515-when-adding-controller-to-m. If you have any virus scanners or 3rd party security related software running, it may also be worth trying to deactivate this to see if it may be interfering with .NET or the MSI installer.
