Are you using the TestStand Version Selector to switch between 3.5 and 4.0? I got my upgrade to 3.5 from 2.0 the day before 4.0 was released and haven't done anything in 3.5 but I've been able to switch between 2.0 and 4.0 with no problems.
Dennis is correct, and the knowledgebase here has more information on setting the Active TestStand version. You may also find this link useful. Hope it helps.