_From @ealsur on May 20, 2016 20:11_
Using C# Extension 1.0.11 and ASPNET Core RC2 (dotnet cli installed) using net461, I am unable to get Omnisharp to work.
Whenever I open a folder with a project with that version of ASPNET Core I get this error on the Omnisharp Log:
[INFORMATION:OmniSharp.DotNet.DotNetProjectSystem] Processing [ProjectState] myproject/.NETFramework,Version=v4.6.1[ERROR:Microsoft.AspNetCore.Diagnostics.ExceptionHandlerMiddleware] An unhandled exception has occurred: The specified path, file name, or both are too long. The fully qualified file name must be less than 260 characters, and the directory name must be less than 248 characters.
_Copied from original issue: Microsoft/vscode#6592_
It was occured in my environment(win8.1x64+vscode1.1.1+omnisharp-vscode1.0.8).
I found the some node_modules/** directory created by npm is too deep and exceed MAX_PATH(260).
It's avoidable by adding the node_modules/**/*.* entry in "exclude" setting in project.json.
IMHO, generator-aspnet template should add the exclude entry in project.json because it's always occured the generated by template(at least using bootstrap).
I've had this issue since the release of the RC2 update. I also found it was due to the node_modules folder being so far deep. Adding it to the exclude of project.json worked for me as well.
I can confirm that adding an _exclude_ attribute to project.json fixes the issue.

The problem is that, according to the official annoucement, the _exclude_ attribute is now deprecated on RC2 (it should be inside the _buildOptions > compile_ tree), maybe it's something that is still left to migrate on Omnisharp's logic.
This looks like the same issue as https://github.com/OmniSharp/omnisharp-vscode/issues/279. So long as you're using the latest released version of the C# extension, it _should_ be using the latest schema for project.json.
cc @troydai
@DustinCampbell I'm using C# extension version 1.0.11, unless there's a new one that is not published on the Marketplace. I'm attaching a screen capture of a project load without the "exclude" setting that shows the error on the Omnisharp log and what happens when you add the setting.

This should be much better with the 1.3.0 release. In that release, we'll be using the CoreCLR-based OmniSharp for .NET Core projects, which supports long file names. The problem is that the .NET Desktop version of OmniSharp (which we currently use on Windows) can crash with MAX_PATH issues.
I'm going to go ahead and close this issue. Let me know if you see this problem anymore.