if you are missing references such as the following...
namespaces>
add namespace="System.ComponentModel" />
add namespace="System.Globalization" />
add namespace="DotNetNuke.Services.Localization" />
add namespace="DotNetNuke.Entities.Users" />
add namespace="DotNetNuke" />
add namespace="DotNetNuke.Common" />
add namespace="DotNetNuke.Data" />
add namespace="DotNetNuke.Framework" />
add namespace="DotNetNuke.Modules" />
add namespace="DotNetNuke.Security" />
add namespace="DotNetNuke.Services" />
add namespace="DotNetNuke.UI" />
dd namespace="DotNetNuke.Entities.Portals" />
add namespace="DotNetNuke.Common.Utilities" />
add namespace="DotNetNuke.Services.Exceptions" />

(you should find the full list of these references listed in your web.config file)

then you have the same problem i had, and it is due to the web.config file not being registered by the web application that is running your source/debug code.
shut down your web service
delete all directories
delete and recreate a blank DotNetNuke SQL database again
start up web services/IIS
delete any invalid virtual directories that were caused by you deleting the folders they point to...
unzip the source code again, and open it up, and run the install using the source code.
thats what i did and it worked.
good luck
josh