Unable to update the EntitySet ... because it has a DefiningQuery and no element exists

This is the case for me. Simply removing resulted in another error.  I followed the steps of this post except the last one. For your convenience, I copied the 4 steps from the post   that I followed to solve the problem as following:

Right click on the edmx file, select Open with, XML editor
Locate the entity in the edmx:StorageModels element
Remove the DefiningQuery entirely
Rename the store:Schema="dbo" to Schema="dbo" (otherwise, the code will generate an error saying the name is invalid)

http://social.msdn.microsoft.com/Forums/en/adodotnetentityframework/thread/220262bd-85d4-4f29-96a8-4a7d1d2c8293