I un-installed and re-installed all my Azure SDK's, to no avail.
This link
Debugging Azure: Error attaching the debugger to the IIS worker proccess
told me where to look for the error that was causing it to fail, which led me to this link:
The ACL on the Windows Azure registry entries were not in "canonical order".
All you have to do is fix that and this error goes away.
These are the steps I took:
1.) regedit, navigate to HKLM\Software\Microsoft\Windows\Windows Azure
2.) Right-click, choose "Permissions". You will get a warning that the
security information is incorrect and you get a button labelled "Re-Order".
Click this and the security information then shows up as normal.
3.) Follow the same steps for the Windows Azure AppFabric and Windows Azure Emulator
registry entries in the list after the Windows Azure entry.
Problem Solved!
Note that I found the key under HKLM\Software\Microsoft\Windows Azure, not under Windows\Windows Azure.