I have this issue I can't find solution for a couple of days now as I am working on creating External Content Types for Sharepoint Online 2013 (trial period will expire in the next 5 days :( ).
I strictly followed this tutorial http://msdn.microsoft.com/en-us/library/office/ff953200(v=office.14).aspx
I know my wcf service works as I can view the wsdl and service in the browser
Now when I open the Sharepoint Designer 2013 or 2010 I could not successfully add connection using WCF Service as I always got this error
I feel that Sharepoint Designer can see the WCF Service because the progress bar is connecting, however, it seems like there is problem reading the returned result.
Note that I'm connected to my Sharepoint online and have added secure store properly. However, since my WCF is hosted locally, I think I don't need the secure store at this stage. But because of the error, I also try to use my secure store with app id name "LOCALHOST" and supply my local username/password in this format domain\username.
I really appreciate if you could help me this pain in the neck issue.
If I put my service in public such in Azure I've got different error though.But again, I can view the wcf service exposed in public from my local. Also, the connecting progress bar is showing giving me idea that sharepoint designer can actually see the service.