vscode-csharp: Microsoft.Build.Exceptions.InvalidProjectFileException: The SDK 'Microsoft.NET.Sdk' specified could not be found.

Environment data

dotnet --info
.NET Command Line Tools (1.0.1)

Product Information:
 Version:            1.0.1
 Commit SHA-1 hash:  005db40cd1

Runtime Environment:
 OS Name:     Windows
 OS Version:  10.0.15063
 OS Platform: Windows
 RID:         win10-x64
 Base Path:   C:\Program Files\dotnet\sdk\1.0.1

(No Visual Studio)

VS Code version: 1.18.0 C# Extension version: ms-vscode.csharp-1.13.0

Steps to reproduce

Start OmniSharp server (On VS Code startup or Restart OmniSharp)

Expected behavior

OmniSharp server starts and loads all project files.

Actual behavior

[warn]: OmniSharp.MSBuild.MSBuildProjectSystem
        Failed to load project file 'd:\my-proj\app-server\src\DMProg.Core\DMProg.Core.csproj'.

See OmniSharp log:

Starting OmniSharp server at 11/9/2017, 12:52:40 PM
    Target: d:\my-proj\app-server

OmniSharp server started
    Path: D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\OmniSharp.exe
    PID: 9296

[dbug]: OmniSharp.MSBuild.Discovery.Providers.VisualStudioInstanceProvider
        An exception was thrown while retrieving Visual Studio instances.
System.DllNotFoundException: Unable to load DLL 'Microsoft.VisualStudio.Setup.Configuration.Native.dll': The specified module could not be found. (Exception from HRESULT: 0x8007007E)
   at OmniSharp.MSBuild.Discovery.Interop.GetSetupConfiguration(ISetupConfiguration& configuration, IntPtr reserved)
   at OmniSharp.MSBuild.Discovery.Interop.GetSetupConfiguration()
   at OmniSharp.MSBuild.Discovery.Providers.VisualStudioInstanceProvider.GetInstances()
[info]: OmniSharp.MSBuild.Discovery.MSBuildLocator
        Located 1 MSBuild instance(s)
            1: StandAlone 15.0 - "D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin"
[info]: OmniSharp.MSBuild.Discovery.MSBuildLocator
        MSBUILD_EXE_PATH environment variable set to 'D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin\MSBuild.exe'
[info]: OmniSharp.MSBuild.Discovery.MSBuildLocator
        Registered MSBuild instance: StandAlone 15.0 - "D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin"
            CscToolExe = csc.exe
            CscToolPath = D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin\Roslyn
            MSBuildExtensionsPath = D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild
            MSBuildToolsPath = D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin
[dbug]: OmniSharp.MSBuild.Discovery.MSBuildLocator
        Attempting to resolve 'Microsoft.Build.Framework, Version=15.1.0.0, Culture=neutral, PublicKeyToken=b03f5f7f11d50a3a'
[dbug]: OmniSharp.MSBuild.Discovery.MSBuildLocator
        Resolved 'Microsoft.Build.Framework' to 'D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin\Microsoft.Build.Framework.dll'
[dbug]: OmniSharp.MSBuild.Discovery.MSBuildLocator
        Attempting to resolve 'Microsoft.CodeAnalysis.VisualBasic.Workspaces, Version=2.4.0.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35'
[dbug]: OmniSharp.MSBuild.Discovery.MSBuildLocator
        Attempting to resolve 'Microsoft.CodeAnalysis.VisualBasic.Features, Version=2.4.0.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35'
[info]: OmniSharp.Cake.CakeProjectSystem
        Detecting Cake files in 'd:\my-proj\app-server'.
[info]: OmniSharp.Cake.CakeProjectSystem
        Could not find any Cake files
[info]: OmniSharp.DotNet.DotNetProjectSystem
        Initializing in d:\my-proj\app-server
[info]: OmniSharp.DotNet.DotNetProjectSystem
        Auto package restore: False
[info]: OmniSharp.DotNet.DotNetProjectSystem
        Update workspace context
[info]: OmniSharp.DotNet.DotNetProjectSystem
        Resolving projects references
[dbug]: OmniSharp.MSBuild.Discovery.MSBuildLocator
        Attempting to resolve 'Microsoft.Build'
[dbug]: OmniSharp.MSBuild.Discovery.MSBuildLocator
        Resolved 'Microsoft.Build' to 'D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin\Microsoft.Build.dll'
[dbug]: OmniSharp.MSBuild.MSBuildProjectSystem
        MSBuild environment: 
Mode: Standalone
RunningTests: False
RunningInVisualStudio: False
MSBuildToolsDirectory32: D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin
MSBuildToolsDirectory64: D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin
MSBuildSDKsPath: C:\Program Files\dotnet\sdk\1.0.1
CurrentMSBuildConfigurationFile: D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin\MSBuild.exe.config
CurrentMSBuildExePath: D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin\MSBuild.exe
CurrentMSBuildToolsDirectory: D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin
VisualStudioInstallRootDirectory: 
MSBuildExtensionsPath: D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin

[info]: OmniSharp.MSBuild.MSBuildProjectSystem
        No solution files found in 'd:\my-proj\app-server'
[dbug]: OmniSharp.MSBuild.Discovery.MSBuildLocator
        Attempting to resolve 'Microsoft.Build, Version=15.1.0.0, Culture=neutral, PublicKeyToken=b03f5f7f11d50a3a'
[dbug]: OmniSharp.MSBuild.Discovery.MSBuildLocator
        Resolved 'Microsoft.Build' to 'D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin\Microsoft.Build.dll'
[info]: OmniSharp.MSBuild.MSBuildProjectSystem
        Loading project: d:\my-proj\app-server\src\DMProg.Core\DMProg.Core.csproj
[dbug]: OmniSharp.MSBuild.ProjectFile.ProjectFileInfo
        'MSBuildExtensionsPath' set to 'D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild'
[dbug]: OmniSharp.MSBuild.ProjectFile.ProjectFileInfo
        'CscToolPath' set to 'D:\User\cja\.vscode\extensions\ms-vscode.csharp-1.13.0\.omnisharp\msbuild\15.0\Bin\Roslyn'
[dbug]: OmniSharp.MSBuild.ProjectFile.ProjectFileInfo
        'CscToolExe' set to 'csc.exe'
[dbug]: OmniSharp.MSBuild.Discovery.MSBuildLocator
        Attempting to resolve 'Microsoft.Build.resources, Version=15.1.0.0, Culture=en-US, PublicKeyToken=b03f5f7f11d50a3a'
[dbug]: OmniSharp.MSBuild.Discovery.MSBuildLocator
        Attempting to resolve 'Microsoft.Build.resources, Version=15.1.0.0, Culture=en-US, PublicKeyToken=b03f5f7f11d50a3a'
[warn]: OmniSharp.MSBuild.MSBuildProjectSystem
        Failed to load project file 'd:\my-proj\app-server\src\DMProg.Core\DMProg.Core.csproj'.
d:\my-proj\app-server\src\DMProg.Core\DMProg.Core.csproj(1,1)
Microsoft.Build.Exceptions.InvalidProjectFileException: The SDK 'Microsoft.NET.Sdk' specified could not be found.  d:\my-proj\app-server\src\DMProg.Core\DMProg.Core.csproj
   at Microsoft.Build.Shared.ProjectErrorUtilities.ThrowInvalidProject(String errorSubCategoryResourceName, IElementLocation elementLocation, String resourceName, Object[] args)
   at Microsoft.Build.Evaluation.Evaluator`4.ExpandAndLoadImportsFromUnescapedImportExpressionConditioned(String directoryOfImportingFile, ProjectImportElement importElement, List`1& projects, Boolean throwOnFileNotExistsError)
   at Microsoft.Build.Evaluation.Evaluator`4.ExpandAndLoadImports(String directoryOfImportingFile, ProjectImportElement importElement)
   at Microsoft.Build.Evaluation.Evaluator`4.EvaluateImportElement(String directoryOfImportingFile, ProjectImportElement importElement)
   at Microsoft.Build.Evaluation.Evaluator`4.PerformDepthFirstPass(ProjectRootElement currentProjectOrImport)
   at Microsoft.Build.Evaluation.Evaluator`4.Evaluate(ILoggingService loggingService, BuildEventContext buildEventContext)
   at Microsoft.Build.Evaluation.Project.Reevaluate(ILoggingService loggingServiceForEvaluation, ProjectLoadSettings loadSettings)
   at Microsoft.Build.Evaluation.Project.ReevaluateIfNecessary(ILoggingService loggingServiceForEvaluation, ProjectLoadSettings loadSettings)
   at Microsoft.Build.Evaluation.Project.Initialize(IDictionary`2 globalProperties, String toolsVersion, String subToolsetVersion, ProjectLoadSettings loadSettings)
   at Microsoft.Build.Evaluation.Project..ctor(String projectFile, IDictionary`2 globalProperties, String toolsVersion, String subToolsetVersion, ProjectCollection projectCollection, ProjectLoadSettings loadSettings)
   at Microsoft.Build.Evaluation.ProjectCollection.LoadProject(String fileName, IDictionary`2 globalProperties, String toolsVersion)
   at OmniSharp.MSBuild.ProjectFile.ProjectFileInfo.LoadProject(String filePath, String solutionDirectory, ILogger logger, MSBuildInstance msbuildInstance, MSBuildOptions options, ICollection`1 diagnostics, ImmutableArray`1& targetFrameworks)
   at OmniSharp.MSBuild.ProjectFile.ProjectFileInfo.Create(String filePath, String solutionDirectory, ILogger logger, MSBuildInstance msbuildInstance, MSBuildOptions options, ICollection`1 diagnostics)
   at OmniSharp.MSBuild.MSBuildProjectSystem.LoadProject(String projectFilePath)