http://bugs.winehq.org/show_bug.cgi?id=28350
--- Comment #4 from Hans Leidekker hans@meelstraat.net 2011-09-13 03:20:47 CDT --- (In reply to comment #3)
Forgot to mention, I'm using WiX 3.0 as downloaded from http://wix.codeplex.com/releases/view/44406. Running this natively in Windows works fine. Once you've installed Mono from http://download.mono-project.com/archive/2.10.5/windows-installer/0/mono-2.10.5-gtksharp-2.12.11-win32-0.exe and WiX, and put the WiX tools into your PATH, you just have to cd into the directory extracted from the tar and run 'make'.
I don't see anything suspicious in your msi trace. Do you get the same error with native dotnet?