This problem turned out to be due to the very long relative paths that Visual Studio created to the gsoap-generated files.
Visual Studio has the annoying habit of stepping all the way back to the root C:\ location when building a relative path to files newly added to the project.
Mine was at least 9 levels deep, OUCH.
For whatever reason, this caused Visual Studio to throw an internal compiler error on the gsoap Proxy cpp module.
To fix the relative path, you have to select the file in your project, open the properties box (NOT the property page, confusing), which contains the relative path to the file. You will see that you can easily shorten it, by changing it from stepping back only to the root of the project. You’ll find that if you try to change it, your change won’t stick! I found that changing it to an INVALID path stuck! And THEN, I could change it to a valid relative path.
I’ve also fixed these lousy relative paths directly in the solution file. If you open it as text you can edit the paths directly.
I always found this annoying, but this was the first time it actually broke the build. Upwards.