There's no such thing as C# 2.5. You must be referring to 2.0. Anyhow this may be true of financial institutions, but to say that it's a norm... is not my experience at all. > 15 years of experience.
Sorry, 2.5 was me being sarcastic, so I put it in quotes. It basically means you code mostly in C# 2 with a few C# 3 features cherry-picked (Like null coalesce, maybe implicit typing with var) but avoid anything LINQ-related.
Most of the problems arise from people not understanding that linq queries return iterators, not collections and therefore writing O(n²) loops. But that's not too hard to learn.
Alas, if you are talking about Linq2Sql or Entity Framework, then of course you have to deal with all the typical ORM problems; but this has nothing to do with Linq.
I think the common sentiment is that we'd all hope to hell that we never have to work on a project so crappy that team members can't understand programming language basics.