ASP.Net UpdateProgress breaks when scripts are added to ScriptManager

I'm having trouble with the UpdateProgress and the ScriptManager in ASP.Net. The UpdateProgress fails to display (Inline CSS property | display:none;) when a script is registered in the ScriptManager. I have also registered the script programmatically under the page load method using this method, ASP.NET 4.5 ScriptManager Improvements in WebForms, but still fails. Thanks in advance :).

Aspx:

<asp:ScriptManager ID="scriptManager" runat="server">            
            <Scripts>
                <asp:ScriptReference Path="~/js/mootools-core-1.4.5.js" />
                <asp:ScriptReference Path="~/js/mootools-more-1.4.0.1.js" />
            </Scripts>
        </asp:ScriptManager>

<asp:UpdatePanel ID="UpdatePanel1" runat="server" UpdateMode="Conditional">
                    <ContentTemplate>
                        <asp:Button ID="Button1" runat="server" Text="Button" OnClick="Button1_Click" /> 
                        <div id="panel2Div" runat="server"></div>
                    </ContentTemplate>
                    <Triggers>
                        <asp:AsyncPostBackTrigger ControlID="Button1" />
                    </Triggers>
                </asp:UpdatePanel>
                <asp:UpdateProgress ID="UpdateProgress1" runat="server">
                    <ProgressTemplate>
                        <p>Doing Stuff....</p>
                    </ProgressTemplate>
                </asp:UpdateProgress>

Code Behind:

protected void Button1_Click(object sender, EventArgs e)
        {
            System.Threading.Thread.Sleep(3000);
            panel2Div.InnerHtml = "Updated Panel 2";
        }

if the Script/ScriptReference tags are removed in the ScriptManager, the UpdateProgress works!

EDIT - Problem solved thanks to the pointer given by Nathan. There is indeed a conflict between Mootools and MS AJAX. This is because of the declaration "Type" in Mootools core/more, which is overridden by the MS AJAX. Luckily, it can be adverted by changing the declaration from "Type" to something else. I found the solution HERE, under 'Scott's' post, great name BTW ;).

The steps I took were:

1. Open up your Mootools core and more files (I used VS2012, but Notepad++ should work fine)
2. Find (CTRL+F) "new Type" and replace with "new mooTools"
3. Find (CTRL+F) "this.Type" and replace with "this.mooTools"
4. Find (CTRL+F) "Type" and replace with "mooTools"
5. Make sure that you do this for both files (unless your only using core)

Big thanks to Nathan and 'Scott' for helping me out.

It probably has something to do with the mootools not playing nicely with asp.net ajax. This article might help you out: asp.net forums on mootools not working with asp.net ajax