When adding. or updating an existing working service reference in VS2013. you will recieve a :
"Service Reference Error: Failed to generate code for the service reference"
A workaround to resolve the error is to uncheck the "Reuse Types in Referenced assemblies.
The project works perfectly in VS2010 without unchecking this option.
The behaviour has changed, or regressed in some way
Other people have experienced and documented the error as well.