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In the .bld file you posted, the failing step named 'Build - vzDLUpgrade.sln - Debug Compile' is configured to use %7.1_compiler% (which expands to 'C:\Program Files\Microsoft Visual Studio .NET 2003\Common7\IDE\devenv.com') in the previously mentioned Override field, which will override the default parsing of the .sln file for the version information. After I cleared out that field, it built the solution using MSBuild as expected (running on a box w/ VS2003 & 2005 installed).
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