This is caused by latest MS security update. After applying these two 3126587 and 3126593 previous versions of Incredibuild stopped working.
Command line error D8037 : cannot create temporary il file
The solution is to uninstall it
https://support.microsoft.com/en-us/kb/3126587
https://support.microsoft.com/en-us/kb/3126593
On Windows 10 the responsible update is KB3135173
Next steps
Also it’s necessary to disable these updates in auto-update!
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