There have been several techniques that have been posted on getting the MVC3 reference assemblies deployed as part of your Windows Azure Solution.
http://blog.smarx.com/posts/asp-net-mvc-in-windows-azure
This is something I learned today is in Visual Studio 2010 SP1.
If you open up the context menu for the project, you’ll see “Add Deployable Dependencies”. When you select the parts you need it adds the _bin_deployableAssemblies to the project and a copy. With Vs2010 SP1, the build targets have been updated to ensure these are emitted to your /bin path as required.
More on the targets approach here from Scott Hanselman http://www.hanselman.com/blog/BINDeployingASPNETMVC3WithRazorToAWindowsServerWithoutMVCInstalled.aspx

I recall we had a similar issue when running document conversion services.
If you’re attempting Word or PowerPoint viewing and you see errors in the event log regarding AppServerHost.exe – you need to enable non-sandboxing.
http://blogs.msdn.com/b/opal/archive/2010/04/25/faq-sharepoint-2010-rtm-installation.aspx
Open SharePoint 2010 Management Shell, then run:
#Enable Word Web App:
$e = Get-SPServiceApplication | where {$_.TypeName.Equals("Word Viewing Service Application")}
$e.WordServerIsSandboxed = $false
$e.WordServerIsSandboxed
#Enable PowerPoint Web App - you need to answer "Y" for each command:
Get-SPPowerPointServiceApplication | Set-SPPowerPointServiceApplication -EnableSandboxedViewing $false
Get-SPPowerPointServiceApplication | Set-SPPowerPointServiceApplication -EnableSandboxedEditing $false
On the server, use Notepad to open c:\windows\system32\inetsrv\config\applicationHost.config. Add the line below at the end of the dynamicTypes section.
<add mimeType="application/zip" enabled="false" />