See the code below. If I initialize more than one entity context, then I get the following exception on the 2nd set of code only. If I comment out the second set it works.

{"The underlying provider failed on Open."}

Inner: {"Communication with the underlying transaction manager has failed."}

Inner: {"Error HRESULT E_FAIL has been returned from a call to a COM component."}

Note that this is a sample app and I know it doesn't make sense to create 2 contexts in a row. However, the production code does have reason to create multiple contexts in the same TransactionScope, and this cannot be changed.

Edit

Here is a previous question of me trying to set up MS-DTC. It seems to be enabled on both the server and the client. I'm not sure if it is set up correctly. Also note that one of the reasons I am trying to do this, is that existing code within the TransactionScope uses ADO.NET and Linq 2 Sql... I would like those to use the same transaction also. (That probably sounds crazy, but I need to make it work if possible).

http://stackoverflow.com/questions/794364/how-do-i-use-transactionscope-in-c

Solution

Windows Firewall was blocking the connections to MS-DTC.

using(TransactionScope ts = new System.Transactions.TransactionScope())
    	{
                using (DatabaseEntityModel o = new DatabaseEntityModel())
                {
                    var v = (from s in o.Advertiser select s).First();
                    v.AcceptableLength = 1;
                    o.SaveChanges();
                }

                //-> By commenting out this section, it works
                using (DatabaseEntityModel o = new DatabaseEntityModel())
                {
                    //Exception on this next line
                    var v = (from s1 in o.Advertiser select s1).First();                         v.AcceptableLength = 1;
                    o.SaveChanges();
                }
                //->

    	        ts.Complete();
    	}