Thanks for your question but I have just this minute found and fixed the issue.
I'm not sure how this happened but for anyone else who has this issue. I was able to publish my application and run the subsequent install after I made the following changes.
- Make sure that you have "Embed manifest with default settings" selection in the application properties page. (I don't need a custom manifest so this is fine for me).
- In VS, solution explorer look for and delete the app.manifest file.
I must have inadvertently changed this setting at some point which caused the app.manifest file to be created. I'm not sure why this causes a problem with click once but removing it seems to resolve the issue.
I hope this helps someone else.
Geoff