Line: 54
Error: Unhandled Error in Silverlight Application
Code: 2103   
Category: InitializeError      
Message: Invalid or malformed application: Check manifest   

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The solution is very easy .

You can see that the Project that set as a Start project is not the Web project , but Module1 in my case.

So just change that and set the correct project – The Web Project that defined for Silverlight to be the start project .

That will solve your problem.