.Net XmlSchemaSet works on Client but not Server OS?

Question

I have the following code that loads the xhtml_transitional.xsd file (source at http://www.w3.org/2002/08/xhtml/xhtml1-transitional.xsd)

    private static void SetupSchemas()
    {
        if (_xmlSchemaSet != null) return;

        _xmlSchemaSet = new XmlSchemaSet();
        _xmlSchemaSet.ValidationEventHandler += ValidationHandler;

        using (var xmlStringReader = new StringReader(Properties.Resources.xhtml_transitional))
        {
            _xmlSchemaSet.Add(XmlSchema.Read(xmlStringReader, null));
        }

        _xmlSchemaSet.Compile();
    }

Now on all our dev machines (Windows XP, VS 2008 Pro / .Net 3.5 installed) _xmlSchemaSet.GlobalElements contains all 89 elements of the xhtml xsd after the .Compile() call but on Win2k3 Server(s) the same code has 0 .GlobalElements. .. why's that?

Basically what I do is use that _xmlSchemaSet later on for xhtml element validation, but on those server(s) validation always fails because there aren't any elements..

Any ideas why this is happening and what I can do?