DTF Custom Action reference in WiX not a valid WiX reference

Question

I can build a managed custom action just fine using the DTF tools (I.E MakeSfxCA.exe)
My post build event command line looks like this:

"%WIX%SDK\MakeSfxCA.exe"
"$(TargetDir)$(TargetName).CA.dll"
"%WIX%SDK\x86\SfxCA.dll"
"$(TargetDir)$(TargetName).dll"
"$(TargetDir)Microsoft.Deployment.WindowsInstaller.dll"

But whenever I attempt to add a reference to the compiled dll I get an error stating something to the effect of

“make sure that the file is accessible and a valid WiX reference”

If i add the project as a ref using visual studio (2010 & 2008) my WiX Project compiles but does not use the dll. I receive this message when I attempt to run the msi

There is a problem with this Windows Installer package. 
A DLL required for this install to complete could not be run. 
Contact your support personnel or package vendor.

My wxs file looks like this

My OS is Windows 7 and I'm using .net 4.0 is that makes a difference and I'm using the weekly build

http://wix.sourceforge.net/releases/3.5.1721.0/

Answer 1

My issue was with the compiled dll not being compiled for the correct type of environment. I.E. building a x64 version for a x86 installer. Feel free to comment if I need to clarify more.