An exception occurred when trying to issue security token

Security Token Service Application Error:

Problems:  Unable to Login with Claim base authentication to SharePoint 2010 Site

Errors

An exception occurred when trying to issue security token: The requested service, 'http://localhost:32843/SecurityTokenServiceApplication/securitytoken.svc' could not be activated. See the server's diagnostic trace logs for more information.

Or

WebHost failed to process a request.

 Sender Information: System.ServiceModel.ServiceHostingEnvironment+HostingManager/15688314

 Exception: System.ServiceModel.ServiceActivationException: The service '/SecurityTokenServiceApplication/securitytoken.svc' cannot be activated due to an exception during compilation.  The exception message is: Method not found: 'System.String System.ServiceModel.Activation.Iis7Helper.ExtendedProtectionDotlessSpnNotEnabledThrowHelper(System.Object)'.. ---> System.MissingMethodException: Method not found: 'System.String System.ServiceModel.Activation.Iis7Helper.ExtendedProtectionDotlessSpnNotEnabledThrowHelper(System.Object)'.

   at System.ServiceModel.WasHosting.MetabaseSettingsIis7V2.WebConfigurationManagerWrapper.BuildExtendedProtectionPolicy(ExtendedProtectionTokenChecking tokenChecking, ExtendedProtectionFlags flags, List`1 spnList)

   at System.ServiceModel.WasHosting.MetabaseSettingsIis7V2.WebConfigurationManagerWrapper.GetExtendedProtectionPolicy(ConfigurationElement element)

   at System.ServiceModel.WasHosting.MetabaseSettingsIis7V2.ProcessWindowsAuthentication(String siteName, String virtualPath, HostedServiceTransportSettings& transportSettings)

   at System.ServiceModel.WasHosting.MetabaseSettingsIis7V2.CreateTransportSettings(String relativeVirtualPath)

   at System.ServiceModel.Activation.MetabaseSettingsIis.GetTransportSettings(String virtualPath)

   at System.ServiceModel.Activation.MetabaseSettingsIis.GetAuthenticationSchemes(String virtualPath)

   at System.ServiceModel.Channels.HttpChannelListener.ApplyHostedContext(VirtualPathExtension virtualPathExtension, Boolean isMetadataListener)

   at System.ServiceModel.Channels.HttpTransportBindingElement.BuildChannelListener[TChannel](BindingContext context)

   at System.ServiceModel.Channels.BindingContext.BuildInnerChannelListener[TChannel]()

   at System.ServiceModel.Channels.MessageEncodingBindingElement.InternalBuildChannelListener[TChannel](BindingContext context)

   at System.ServiceModel.Channels.BinaryMessageEncodingBindingElement.BuildChannelListener[TChannel](BindingContext context)

   at System.ServiceModel.Channels.BindingContext.BuildInnerChannelListener[TChannel]()

   at System.ServiceModel.Channels.Binding.BuildChannelListener[TChannel](Uri listenUriBaseAddress, String listenUriRelativeAddress, ListenUriMode listenUriMode, BindingParameterCollection parameters)

   at System.ServiceModel.Description.DispatcherBuilder.MaybeCreateListener(Boolean actuallyCreate, Type[] supportedChannels, Binding binding, BindingParameterCollection parameters, Uri listenUriBaseAddress, String listenUriRelativeAddress, ListenUriMode listenUriMode, ServiceThrottle throttle, IChannelListener& result, Boolean supportContextSession)

   at System.ServiceModel.Description.DispatcherBuilder.BuildChannelListener(StuffPerListenUriInfo stuff, ServiceHostBase serviceHost, Uri listenUri, ListenUriMode listenUriMode, Boolean supportContextSession, IChannelListener& result)

   at System.ServiceModel.Description.DispatcherBuilder.InitializeServiceHost(ServiceDescription description, ServiceHostBase serviceHost)

   at System.ServiceModel.ServiceHostBase.InitializeRuntime()

   at Microsoft.IdentityModel.Protocols.WSTrust.WSTrustServiceHost.InitializeRuntime()

   at System.ServiceModel.ServiceHostBase.OnOpen(TimeSpan timeout)

   at System.ServiceModel.Channels.CommunicationObject.Open(TimeSpan timeout)

   at System.ServiceModel.ServiceHostingEnvironment.HostingManager.ActivateService(String normalizedVirtualPath)

   at System.ServiceModel.ServiceHostingEnvironment.HostingManager.EnsureServiceAvailable(String normalizedVirtualPath)

   --- End of inner exception stack trace ---

   at System.ServiceModel.ServiceHostingEnvironment.HostingManager.EnsureServiceAvailable(String normalizedVirtualPath)

   at System.ServiceModel.ServiceHostingEnvironment.EnsureServiceAvailableFast(String relativeVirtualPath)

 Process Name: w3wp

 Process ID: 4780

Solution: Uninstall Security Update No. - KB2756920

http://blogs.technet.com/b/praveenh/archive/2013/01/15/issue-found-with-net-framework-3-5-1-security-update-kb2756920.aspx