My next suggestion is see if you have a reference to CrystalDecisions.Enterprise namespace in your primary project (not the setup application).
Another suggestion is to build a simple Crystal Install appication. Just create a new windows application, add the CR Windows Viewer to the default form. No other coding is necessary Then add a setup project to the application, make sure you have the project output included, the merge modules and keycode. Then build the setup application. This is a 5 - 10 minute effort
What the second choice does is show whether there is problem in the other application or in the setup process. If the simple setup builds and runs without error, then you know to look back at the primary project. If the simple setup fails then the problem likely lies in the workflow being used to create the setup.
Let us know if any of this helps.
Regards,
John W.