Thanks for the reply Kevin.

Well I did as you suggested. I took a new app.config from the provided templates and this time I added nothing extraneous. I just replaced the provided database connection string with my own as follows:

<?xml version="1.0" encoding="utf-8" ?>
<configuration>
	<configSections>
		<section name="databases" type="System.Configuration.NameValueSectionHandler" />
	</configSections>
	<appSettings>
	    <add key="SecurityDatabaseKey" value="" />
	    <add key="MessageDatabaseKey" value="" />
		<add key="EventLog\Level" value="Verbose" />
		<add key="EventLog\Name" value="Application" />
		<add key="EventLog\Machine" value = "." />
		<add key="TraceLog\Level" value="Verbose" />
		<add key="TraceLog\Name" value="Application" />
		<add key="TraceLog\Machine" value = "." />
		<add key="TransactionLog\Level" value="Verbose" />
		<add key="TransactionLog\Name" value="Application" />
		<add key="TransactionLog\Machine" value = "." />
		<add key="LocalizeApp" value="false" />
	</appSettings>
	<databases>
		<add key="ISPS\Connection" value="Data Source=Mercury;Integrated Security=SSPI;Persist Security Info=False;Initial Catalog=ISPS" />
	</databases>
	<system.windows.forms jitDebugging="true" />
</configuration>

Unfortunately the result was the same.