It sounds like the version being referenced in the solution might not be the version deployed to the presentation. Can you confirm when you re-referenced the Telerik utility that it is also the version being loaded at runtime?
There is also this post in the Telerik forum regarding a misspelled controller causing a Null Ref in the menu items.
http://www.telerik.com/community/forums/aspnet-mvc/menu/null-reference-exception.aspx