Can't find assembly when compiling dependent projects to common folder

I'm trying to break a large solution down into a master solution and a set of independent sub-solutions.  As part of that, I started to send the output of the projects to a "/CommonLib" directory inside the solution, and then link to the DLLs rather than the projects. 

The problem I'm encountering (VS2008 9.0.21022.8) is that I'm getting an error while compiling MyAssembly2:

     Error    6    The type or namespace name 'MyAssembly1' could not be found (are you missing a using directive or an assembly reference?)   

I set the Project Dependencies so that it shows that MyAssembly2 depends on MyAssembly1, and I can verify that the "Build Order" is correct, but during the compilation of MyAssembly2 it still can't find MyAssembly1.  If it makes a difference, "Copy Local" is set to "False" (and I ...