Remember when .net came out and it was hailed as the end of DLL Hell? Well, it should have been but for various reasons, it hasn’t been. One of the breaking changes in SQL Server 2008:
SQL Server 2008 installs .NET Framework 3.5 SP1, which updates libraries in the Global Assembly Cache (GAC). If you have unsupported libraries registered in a SQL Server database, your SQL Server application may stop working after upgrading to SQL Server 2008. This is because servicing or upgrading libraries in the GAC does not update assemblies inside SQL Server. If an assembly exists both in a SQL Server database and in the GAC, the two copies of the assembly must exactly match. If they do not match, an error will occur when the assembly is used by SQL Server CLR integration.
C’est la cotton-picking vie, as we who had to learn french at school are fond of saying.