Expression Blend is almost entirely written in C#/WPF.
There is also at least one text editor component under development (not sure if it is already available) from a commercial third party, Actipro, which is supposedly going to be available in Silverlight and WPF versions.
From your description of what you need, you seem to be looking more for examples or code for writing a full-blown design surface yourself. I am not aware of a suitable library for that.
There was a company in Canada that made a design surface toolkit for WPF, but I can't recall its name right now. I also believe the component is not available any longer.