In order to parse (and when necessary, update) project files in a solution (for version, properties, etc.), the Make VS.NET action attempts to convert web project URLs to local filenames (see the last section of the Make VS.NET Action help topic for details on how it does this). For some reason, this conversion is failing for your web project.
If you are not using the set version/properties or base address options of the Make VS.NET action, you can work around it by configuring IIS to allow .csproj files to be accessed over HTTP (see this thread for details:
http://www.kinook.com/Forum/showthread.php?threadid=278), allowing the files to be read via their URL path.
If not, we'll need to examine your configuration to see how to support it. It does seem unusual that your project exists in the root of the web site (typically, when created from VS.NET, each web project will go in a separate subdirectory of the web site). Send the following to
support@kinook.com:
1) The info from Help | About | Install Info in VBP
2) Version of VS.NET
3) The .bld file, .sln file, and constituent project files (no source code files)
4) The version of IIS you are running
5) Details about your web site configurations. For IIS 4.0/5.0, install the MS MetaBase Editor (download from
http://support.microsoft.com/default...NoWebContent=1) and export LM/W3SVC; for IIS 6.0, they're found in C:\Windows\System32\InetSrv\MetaBase.xml.