Thanx for the response. I actually deleted the reference to the service completely (and the resulting folders) and reattached it (several times), thinking along the same lines.
As for referencing assemblies from the GAC, I have added a couple items to the project:
<Reference Include="System" />
<Reference Include="System.Configuration.Install" />
<Reference Include="System.Core" />
<Reference Include="System.EnterpriseServices" />
<Reference Include="System.Management" />
<Reference Include="System.Runtime.Serialization" />
<Reference Include="System.ServiceModel" />
<Reference Include="System.Web.Services" />
<Reference Include="System.Xml.Linq" />
<Reference Include="System.Data.DataSetExtensions" />
<Reference Include="Microsoft.CSharp" />
<Reference Include="System.Data" />
<Reference Include="System.ServiceProcess" />
<Reference Include="System.Xml" />
Does that help you at all?
Also... I built a complete new virtual machine, thinking maybe I corrupted something in my other environment... so the likelihood of there being a corruption in the GAC would be slim.
I appreciate the help!