It also seems to be recompiling ActiveX, here is a couple of lines above the error, the error and the final lines:
PPU Loading C:\lazarus\fpc\2.4.2\units\i386-win32\winunits-base\activex.ppu
Recompiling ActiveX, checksum changed for Types
Fatal: Can't find unit ActiveX used by ShellApi
Fatal: Compilation aborted
Error: C:\lazarus\fpc\2.4.2\bin\i386-win32\ppc386.exe returned an error exitcode
(normal if you did not specify a source file to be compiled)
I decided to try this from the command line using only fpc to see if I got the same message or if Lazarus was inserting something that was messing up the compile but I got the same error.
I did manage to bypass the error for the moment by removing shellapi from the uses clause of only file that seems to use it. I guess it will fail later on but right now I'm just going error by error.