The type or namespace name 'Linq' does not exist in the namespace 'System' (are you missing an assembly reference?)

I receive this error when running a completely new MVC 4.0 project.  The project builds without error and the System.Core library is referenced in the project (as are System.Xml.Linq and System.Data.Linq).  The target framework is set to 4.0 (in the compilation element in web.config).   As I said, this is a brand new project, I simply created the project from the template and tried to run it (after building it).  I'm running on Windows 8 Enterprise which I assume is using IIS8 and I'm using VS 2012.  I've searched a lot and not found any answers to my problem (at least none that fixed it).

Any idea why this is happening and how to fix it?