Symptoms

When users try to open any K2 smartform they receive the following error:

Server Error
The type initializer for 'SourceCode.Forms.Caching.Cache' threw an exception.
Loading this assembly would produce a different grant set from other instances. (Exception from HRESULT: 0x80131401)
More Details
at SourceCode.Forms.Caching.UserVersionCache..cctor()
at SourceCode.Forms.Caching.Cache..cctor()
 

Diagnoses

Tried using an InPrivate/Incognito session as well but still the error remains.
It is also happening on all browsers and on different forms.

Found the following on the net.
"If you get this exception message when trying to browse an ASP.NET site you are developing, first stop the site in IIS, then clear out the ASP.NET Temporary Files folder that relate to your site (default location is under C:WindowsMicrosoft.NETFrameworkv2.0.50727Temporary ASP.NET Files). Then start IIS and try browsing the site.
Restart the application pool account associated with the erroring application."
 

Resolution 

Removing all the files in Temporary Internet Files under .net 4 64-bit and recycling the app pools resolved the issue.  This is an IIS behavior/issue.