Our installer generates a bootstrapper (setup.exe) and a MSI file - a pretty common scenario.

One of the production machines reports a strange problem during install:

• If the user launches the bootstrapper (setup.exe), it reports that .NET 3.5 is not installed. This happens with account under administator group. No matter if they launch it as administrator or not, same behavior.

• the application installs fine when application.msi or OurInstallLauncher.exe (see below for explanation) is started directly no matter if run as administrator is applied.

• We have checked that .NET is installed on the machine (both 64bit and 32bit "versions" = under both C:\Windows\Microsoft.NET\Framework64 and C:\Windows\Microsoft.NET\Framework there is a folder named v3.5.

This happens on a 64 bit Windows 7. I can not reproduce it on my development 64 bit Windows 7. On Windows XP and Vista, it has worked without any problem for a long time so far.

Part of our build script that declares the GenerateBootStrapper task (nothing special):

<ItemGroup>
  <BootstrapperFile Include="Microsoft.Windows.Installer.3.1">
    <ProductName>Microsoft Windows Installer 3.1</ProductName>
  </BootstrapperFile>
  <BootstrapperFile Include="Microsoft.Net.Framework.3.5">
    <ProductName>Microsoft .NET Framework 3.5</ProductName>
  </BootstrapperFile>
</ItemGroup>

  <GenerateBootstrapper
    ApplicationFile=".\Files\OurInstallLauncher.exe"        
    ApplicationName="App name"
    Culture="en"
    ComponentsLocation ="HomeSite"
    CopyComponents="True"
    Validate="True"
    BootstrapperItems="@(BootstrapperFile)"
    OutputPath="$(OutSubDir)"
    Path="$(SdkBootstrapperPath)" />

Note: OurInstallLauncher.exe is language selector that applies a transform to the msi based on user selection. This is not relevant to the question at all because the installer never gets as far as launching this exe!

It displays that .NET 3.5 is missing right after starting setup.exe.

Has anyone seen this behavior before?