Hello @Ramakrishna Talla,
I'm glad that you were able to resolve your issue and thank you for posting your solution so that others experiencing the same thing can easily reference this! Since the Microsoft Q&A community has a policy that "The question author cannot accept their own answer. They can only accept answers by others ", I'll repost your solution in case you'd like to "Accept " the answer.
Issue: Upgraded to .net 8, using one my simple utility c# dll, that will be used in azure function. Getting below error any suggesstions?
Solution: The issue stemmed from the DLL (package) referenced in the Azure Function. After rolling back Microsoft.Extensions.Configuration from version 9.0.1 to 8.0.0, and reinstalling the updated NuGet package of the custom DLL into the Azure Function (Blob Trigger), everything started working correctly without any further issues.
If you have any other questions or are still running into more issues, please let me know. Thank you again for your time and patience throughout this issue.
Please remember to "Accept Answer" if any answer/reply helped, so that others in the community facing similar issues can easily find the solution.