This issue is seen when Visual Studio 2008 is installed using SMS. While trying to update a web reference (WSDL) the error pops up "The custom tool 'MSDiscoCodeGenerator' failed" while building projects"
While facing this issue it is also seen that the Tool Box is there but its empty, Not sure if the Administration Guide is followed to deploy Visual Studio 2008 using SMS. You can always refer to the web link listed to follow the deployment process of Visual Studio 2008
Visual Studio 2008 Administration Deployment Guide
Also to come out of this situation one can try reinstalling the Microsoft .Net Compact Framework 3.5
1. Go to Control Panel Add/Remove
2. Select Microsoft .Net Compact Framework 3.5
3. Remove it
.NET Compact Framework 3.5 Redistributable
1. Install the .Net Compact Framework 3.5
2. Also install Power Toys for .NET Compact Framework 3.5
2. Click Start Run and Type devenv /resetskippkgs
3. Star Visual Studio
4. This above command needs to be run only once. This command is use when initially the packages which fail to load and once running this it make sure next time the packages are getting loaded
These above steps should help resolving this issue.
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