The deployed machine is:Windows Server 2008 32 Bit (VM Ware)
The symptom is that ClickOnce deployed application suddenly doesn't work and triggered this exception. It was working previously for many months.
Reinstalling using ClickOnce method didn't help, same issue remains. It seems that the application couldn't even get started before this exception is triggered.
The problem (for my case), is actually due to ClickOnce deployment.
It seems that certain security policy has been configured in such manner which prevents ClickOnce deployment to execute.
Check out 'windows security log' under 'Event viewer' to determine what has been changed in the context of security.
The solution is not to make use of ClickOnce deployment to deploy the application, make use of the conventional setup file deployment instead.