Hi Epstone
I recreated your environment almost completely and cannot replicate the problem. The only differences are that I am using 32bit (but I did it in 64 bit too) and SQL Server (but I am using SQL Express on my dev boxes).
What about the following keys in your app.config file? They should be as shown below.
Let's try to avoid the remote session for now, until we have done the ritual troubleshooting stuff.
Thanks
Richard