I fixed my problem, however, i changed the way i did paging.  Before, i paging using links and sending the page number to a query string.  Now, i am using the custom paging function on the grid.  I'm still using Linq so not all the data is loaded to the grid.  In order to do this, i had to use an array that would store the page numbers and then load it into the grid on InitializeLayout event.  So far this is working for me. 

It really depends on your setup. Here is what I am trying (against Linq To Sql for NorthWind) and it is working perfectly - I guess if you pass the correct page via GET parameter in the query string, it can be used in the InitializeDataSource event of the grid and you can proceed with binding against your Linq datasource

public partial class _Default : System.Web.UI.Page
{
    protected override void OnInit(EventArgs e)
    {
        base.OnInit(e);
        UltraWebGrid1.InitializeDataSource += new Infragistics.WebUI.UltraWebGrid.InitializeDataSourceEventHandler(UltraWebGrid1_InitializeDataSource);
    }

    void UltraWebGrid1_InitializeDataSource(object sender, Infragistics.WebUI.UltraWebGrid.UltraGridEventArgs e)
    {
        DataClassesDataContext dataContext = new DataClassesDataContext();


        UltraWebGrid1.DataSource = dataContext.Categories.Skip(3).Take(3).ToList();
        UltraWebGrid1.DataBind();     
    }

    protected void Page_Load(object sender, EventArgs e)
    {
       
    }
}

Wanted to find out whether you found a resolution to your problem.  I am having the same challenge.  Not certain it is master page related, but it is the only difference as the same ascx works fine when loaded up in a normal page.

Thanks

Tony,

This is an example of how i used linq and databinding.

var query = from p in db.example select p;

ExampleGrid.Clear();

ExampleGrid.DataSource = query.Skip((PageNumber - 1) * NumberOfRowsToDisplay).Take(NumberOfRowsToDisplay).ToList();

ExampleGrid.DataBind();