I switched some builds from using the visual studio solution to msbuild and the failed build email no longer contains the compile errors.
I updated to 8.0, added the MSBuilld logger per http://stackoverflow.com/questions/1883753/how-to-get-teamcity-to-recognize-msbuild-compilation-errors-using-the-rake-runn and still no errors in the emails. It shows the build as failing and if you view the entire log it will show the compile errors.
Runner type is MSBuild, pointing it directly to the .csproj, framework is 4.5 + 4.0 MSBuild ToolsVersion. Command line parameters is: