Tgea_debug.exe Build Errors

OK, this is killing me. I have dug through all the forums that I can find and I still can't find what is causing this issue. Everything seems to compile properly with no errors and the tgea.exe that comes with the install seems to run fine.

I am using:
Visual Studio 2005 Standard Edition
Microsoft DirectX SDK (February 2007)
Microsoft Platform SDK for Windows Server 2003 R2

I am pretty sure VS2005 is set up properly and the working directory is set to "..\example" and I am still running into this problem. Here is the tail end of my log file.

Executing common/client/help.cs.
Executing common/client/recordings.cs.
Executing common/client/shaders.cs.
Executing common/lighting/sgShaders.cs.
shaders/legacyTerrain/terrainDynamicLightingMaskV.hlsl(2,10): error X1507: failed to open source file: '../shdrConsts.h'
GFXD3DShader::initVertShader - unable to compile shader!
Fatal: (c:\torqueadvanced\sdk\engine\gfx\d3d\gfxd3dshader.cpp @ 123) Unable to compile vertex shader 'shaders/legacyTerrain/terrainDynamicLightingMaskV.hlsl'
Error, a DecalManager (1959770) isn't properly out of the bins!