Separating the Model into it's own project is not breaking the "MVC" pattern. First off, it is just that -- a pattern. The intention of the MVC pattern is to clearly delineate between your data, the data handlers, and the presenters and the way you interface between them. The best way to do it is how Seb suggested:
- YourApp.Data
- YourApp.Web.Mvc
- YourApp.Web.WebService
Something that might help you out is the MVC Storefront that Rob Conery put together. Go watch the video's here:
MVC Storefront Video Series
And if you want to look at the actual code in your browser to quickly see how he did it, go here:
MVC Storefront Codeplex Code Browser