Here's how to troubleshoot when an assembly will not install to the GAC:
Q111094: INFO: Troubleshooting .NET Assembly Installation Issues
Problem: The assembly will not install to the Global Assembly Cache
A. Verify the following information for the assembly:
· The assembly must be strong named. Scroll down to the General Information on .NET Assemblies section under Additional Information for more information on what defines a strong-named assembly.
· The user running the installation must have administrative privileges to install and uninstall.
B. After verifying this information, use Gobal Assembly Cache Tool to install the assembly and verify that this works. Use gacutil /i MyAssembly.dll to install the assembly. Verify that the assembly was installed with the Assembly Cache Viewer.
C. If gacutil installs the file successfully, attempt the following:
1. Open a new Basic MSI project.
2. Add one feature and one component to that feature.
3. In the component's File view, add your assembly.
4. Right-click the assembly and select Set Key File.
5. Select the component and set its Destination property to [Global Assembly Cache].
6. Verify that the component's .NET Application File property is set to [GlobalAssemblyCache]\MyAssembly.dll.
7. Set the component's .NET Scan at Build property to Properties Only or Dependencies and Properties.
8. Build and run the release.