I was once again crafting BDC ADF files by hand (so that I can build up my "get off my lawn!" cred) and hit this lovely error:

"Application definition import failed.  The following error occurred:"

As you can see, there’s an error, but … it’s not going to tell me what it is.

In my case, the issue turned out that I had started off with a functional ADF for a different project that connected to a database and executed a SQL query against a view.  In this new project, I am calling a method on a web service.  I had stripped out the DB specific stuff and added my web service stuff, but failed to update the <LobSystem>’s Type attribute.  I switched it to "WebService" and I happily moved on to newer and more exciting import errors, which were handled in due course.

Here is the wrong LobSystem:

  <LobSystem
    xmlns:xsi=http://www.w3.org/2001/XMLSchema-instance
    xsi:schemaLocation=http://schemas.microsoft.com/office/2006/03/BusinessDataCatalogBDCMetadata.xsd
    Type="Database"
    Version="1.0.0.0" Name="xyzzy"
    xmlns="http://schemas.microsoft.com/office/2006/03/BusinessDataCatalog">

This is correct:

  <LobSystem
    xmlns:xsi=http://www.w3.org/2001/XMLSchema-instance
    xsi:schemaLocation=http://schemas.microsoft.com/office/2006/03/BusinessDataCatalogBDCMetadata.xsd
    Type="WebService"
    Version="1.0.0.0" Name="xyzzy"
    xmlns="http://schemas.microsoft.com/office/2006/03/BusinessDataCatalog">

</end>