Cause: When developing the custom application, the project had a Global.asax added to it. When you compiled the project into a DLL the global.asax class was included in the compiled library. CRM 4.0 only requires a single Global.asax file and it has already included that in its own libraries.
Resolution: You need to remove the Global.asax from your project and compile it again. Put the revised dll in the bin folder and your CRM and the custom application is up and running.
To incorporate a custom .NET application in Dynamics CRM, you are required to copy the custom forms to ISV folder and the compiled library to the bin folder. Sometimes it may so happen that after you have copied the dll to the bin folder and refresh CRM, it would just not load. One small custom application has brought down your CRM.If you enable DevErrors in the web.config file, you would see a screen similar to this when you open CRM.