You receive error 'Namespace:Element1 cannot be a member of substitution group with head element Namespace:Element2' when compiling your solution

Problem

You receive the error 'Namespace:Element1 cannot be a member of substitution group with head element Namespace:Element2' when compiling your BizTalk Server 2006 solution.

Cause

This issue occurs if the schema contains the substitutionGroup element. This primarily affects EAN, UCC, and EDI schemas.

Resolution

Modify the schema so that the schema does not contain the substitutionGroup element. If required, implement similar functionality directly in the XSLT by using a custom functoid or custom script.

Source: Microsoft