Error at startup: "System.TypeInitializationException: The type initializer for Quest.Toad.Editor.EditorTemplates threw an exception." (4312378)

The following error occurs at startup and throughout Toad:

System.Xml.XmlException: Data at the root level is invalid. Line 1, position 1.
Stack trace:
   at System.Xml.XmlTextReaderImpl.Throw(Exception e)
   at System.Xml.XmlTextReaderImpl.Throw(String res, String arg)
   at System.Xml.XmlTextReaderImpl.ParseRootLevelWhitespace()
   at System.Xml.XmlTextReaderImpl.ParseDocumentContent()
   at System.Xml.XmlTextReaderImpl.Read()
   at System.Xml.XmlLoader.Load(XmlDocument doc, XmlReader reader, Boolean preserveWhitespace)
   at System.Xml.XmlDocument.Load(XmlReader reader)
   at System.Xml.XmlDocument.Load(String filename)
   at Quest.Toad.Editor.EditorTemplates..cctor()

Outer exception:

System.TypeInitializationException: The type initializer for Quest.Toad.Editor.EditorTemplates threw an exception.