Just in case anybody else lands here from Google, I was bitten by this error message when using XDocument.Load(Stream) method.
XDocument xDoc = XDocument.Load(xmlStream);
Make sure the stream position is set to 0 (zero) before you try and load the Stream, its an easy mistake I always overlook!
if (xmlStream.Position > 0)
{
xmlStream.Position = 0;
}
XDocument xDoc = XDocument.Load(xmlStream);