SQL Server Setup has encountered the following error: Mixed mode assembly is built against version 'v2.0.50727'
Not a direct answer but some suggestion:

Use SQL Server Installation Center to start: System Configuration Checker. This tool will check for conditions that prevent a successful SQL server installation.



You can alterantivly:

1) Check setup log files at %programfiles%\Microsoft SQL Server\nnn\Setup Bootstrap\Log 

2) Check Your .net 4.0 installation and search your GAC for redundant dll files: