The only thing I have found is the Schema:

<?xml version="1.0" encoding="utf-8"?>
<Project DefaultTargets="Build" xmlns="http://schemas.microsoft.com/developer/msbuild/2003" ToolsVersion="4.0">
  <PropertyGroup>
    <ProjectType>Local</ProjectType>
    <ProductVersion>9.0.30729</ProductVersion>
    <SchemaVersion>2.0</SchemaVersion>

This is in the framework dll file as well as in the application exe file.

I do not think this is the reason.

Also, as I mentioned, I am still wondering why the entire application works but a call to SQL Server command to execute a script would fail.

Also, I doubt this is in the framework. The framework works ok on that part in the Web site. This code is executed ok in that environment. So, this seems to point out to the application exe or because this is a desktop application being executed.