That was really strange.
The annoying Operation could not be completed error message appeared each time I tried to open the dbml designer.
I did some search and found that I need to start the Visual Studio 2008 Command prompt and type the following command:
devenv/resetskippgs
But this didn't helped a lot. The annoying message was still appearing.
Then I found something which made me laugh. It was so unexpected...
If you had the same problem and the devenv/resetskippgs couldn't resolve it, try going to Control Panel -> Administrative Tools -> Event Viewer.
Select the Application node and right click it. Then delete all events.
This would hopefully resolve your problem.
Funny isn't it?