It is not possible to run .net 4.0 application under .net 3.5 runtime (actually .net 2.0 runtime). If it would be .net 3.5 application, you can run it under 2.0 runtime, because .net 3.5 applications are running under .net 2.0 runtime. But there would be problems, this way is dangerous. And if you want to run .net 4.0 application you have to use .net 4.0 runtime, there's no choice. Or you have to rewrite it to .net 3.5.
We had to rewrite some part of our project from .net 3.5 to .net 2.0 RTM, because some of our clients don't have .net 3.5 installed, some of them event don't have 2.0 SP1 installed, so we rewrote our product to be .net 2.0 RTM compliant. We still use some features of .net 3.5 distributing some of .net 3.5 assemblies with our product. Actually it wasn't a problem since we still can use extension methods, lambdas, linq-to-objects. And I'm sure there won't be any problem for you to step back to .net 3.5 runtime. Stepping back from .net 3.5 to .net 2.0 is much more painful :)