Lastly I was working on masterpage, since my sharepoint portal integrates asp.net pages (old asp.net pages which includes runat=server) I am using MasterPage deployment using features. Everything was working perfactly fine. Suddenly I thought, I need some changes in UI and the debugging and troubleshooting started.
The issue is thus deployed masterpage, whenever I change and save, and again try to see it in browser it is giving me '404, resource or one of its dependacny could not be found' oh God. every thing was there not sure what I was missing.
After hours of struglling I thought to open master page using notepad rather than SharePoint Designer, oh and it worked like charm. the error gone. I am not sure what changed SPD was doing in file when I am opening it using SPD.
Posted this just to save time others struggling like me :)
Good Old Notepad saved life.