Jess,
We had the same type of problems when we switched one of our applications to 3.5. unfortunately the BO generator doesn’t offer any non entity centric options. When we switched we hadn’t intended to upgrade the whole BO layer to entities and ran into all kinds of problems. I think the best advice is that if you don’t intend to use entities don’t move the project into 3.5. All the new projects and all the projects that where already using entities works well.