A common error while initialising an EntityModel from a WCF Service is the following message:
ArgumentException was unhandled by user code
The specified named connection is either not found in the configuration, not intended to be used with the EntityClient provider, or not valid.
Or more visual, as below, where you can see it doesn't dig the constructor built by the designer:

There is a pretty large chance that the reasons (and resolutions) for this problem are on the following:
- Reason: Missing or incorrect <connectionStrings> section in App.config
Resolution: Add the right connectionString to the file
- Reason: Screwed up App.config file
Resolution: remove and then re-reference the WCF service
- Reason: Driver issue
Resolution: Take it up with your (presumably third party ) driver provider