Hi Harold,
I believe that this problem could be related to the use of strong names in Prism assemblies, as strong-named assemblies can only reference other strong-named assemblies. Hence this may be the cause of yourDLL conflicts.
In other words, if you rebuild your Microsoft.Practices.Prism assembly and reference it in your application, other assemblies (e.g. Microsoft.Practices.Prism.UnityExtensions) which reference this assembly may cause a conflict.
As a quick test I believe you could try referencing all the the Prism assemblies required in your application and not only the Microsoft.Practices.Prismassembly , that were build from the PrismLibrary solution you modified, as using these new build assemblies altogether may not present this kind of errors.
Also, for more information on Strong-Named Assemblies you could check the followingMSDN article mentioned in the Recommendations for Modifying the Prism Library section of the Prism documentation:
As a side note, you may check that the new assemblies are unblocked before referencing them in your application.
I hope this helps,
Agustin Adami
http://blogs.southworks.net/aadami