VS 2010 Setup Project: Error updating dependencies

I successfully created my Web Setup Project, but a couple of days later the setup project stopped compiling and raised errors instead:

ERROR: Unable to update the dependencies of the project. The dependencies for the object ‘MyAssembly.DLL’ cannot be determined.

Clicking the Refresh Dependencies command in the context menu of the setup project’s Dependencies raised the error

The operation could not be completed.

These errors occur in VS 2010, and seem to be around for several years now (connect, connect, connect).

Workaround

From the workarounds section of this Connect entry, this solution worked for me:

1. Open .VDPROJ file (in a text editor)
2. Find the "Hierarchy" section.
   Delete everything so the section looks like this:

    "Hierarchy"
    {
        
    }

3. Find the "File" section.
   Delete everything so the section looks like this:

        "File"
        {
            
        }

4. Reload the project
5. Rebuild the project.

I removed the whole sections “Hierarchy” and “File”, which also worked.

However, the whole procedure seems cumbersome considering you may have more than one setup project in a solution, and probably more than one solution you are developing or maintaining.

Fix

The error still seems to be present in VS 2010 SP 1. Fortunately, MS in the meantime provides the hotfix KB2286556 which solved the problem for now.