Problem: Your application contains User Scope Settings and you receive the exception.
“Configuration system failed to initialize” when attempting to retrieve these settings.
Solution: The settings file has been corrupted and is unreadable. Close or stop your application and delete the user.config file. The file is located at:
C:/Documents and Settings/[UserName]/Local Settings/Application Data/[AppCompany]/[AppName] /[AppVersion]/
If you are in Visual Studio you can easily find the exact file that is causing the problem by viewing the details and drilling down to the inner exception to find the file name.