Well, I finally found a solution. Firstly, I had to upgrade the code base from 2.0 to 3.5 in order to be able to add the option “Add service link” in VS 2008 or 2010. After that, I noticed that the svcinfo files were essentially empty (with closing tags) and no discos file was created.
I found an article online with a Windows Phone 7 developer reporting the same issue. There was a recommendation to clear the "Reuse types in reference assemblies" checkbox on the Advanced page of the Add Service Link dialog box. As soon as I did this, everything worked like a charm.
Hopefully this information will benefit others at some point.
SteveDog, thanks for all the ideas and help!
Mike
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