There seem to be several ways to create/fix this issue. For me, the CRM product I am using was written in native code and is able to call my .NET dll, but I run into the configuration information needing to be at/above the main application. For me, the CRM application isn't .NET, so I ended up having to put it in my machine.config file (not where I want it). In addition, since my company uses Websense I had a hard time even adding the Service Reference due to a 407 Proxy Authentication Required issue, that to required a modification to the machine.cong.
Proxy solution:
To get the WCF Service Reference to work I had to copy the information from the app.config of my DLL to the main application config (but for me that was machine.config). And I also had to copy the endpoint information to that same file. Once I did that it starting working for me.