Personally when I see something like this I always step back and try to test things that I know should work.
Close VS
Open VS
Create new project --> use the Fez Cobra Console Application project template
Change deployment target to USB -> EMX_EMX
Deploy.
If that works and my LED flashes, I know its something to do with the way my other project is configured.
The other think I’d ask to be double checked is that you have the same firmware and SDK versions. Go into MFDeploy and confirm the Device Capabilities lists 4.1.7.0 (which is SDK version 1.0.16 from Sept 28th). Then check the release notes file in the GHI SDK folder in Program Files. I know you said you are using the same versions, but screenshots always put that question to rest…