This seems to be an Visual Studio issue. Googled it a bit and first thing that I come up with are "Are you using the latest version of VS?". Would it be possible to check if you are on the latest version of Visual Studio? If not, Update and see if it still occurs?
if that doesn't work could you perhaps create a new project in the C:/ drive directly and try it again? Just to rule out that the path length might be an issue (although I would expect VS to give a more specific error in that case)