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I'm wondering if the SET NOCOUNT ON statement in the sproc is what's causing problems. In most cases SF is looking for some type of return that the update succeeded. I'm wondering if they are using the record count returned by ADO.NET and doing a retry if that is returned as zero, which would explain the behavior. I'd give that a try.
Otherwise, you'll likely have to wait for Ben/Trent to reply. There might be a bug and/or something different you have to do when using GUIDs. They might be out this week (based on the number of their posts...0). In which case, just bump this question up when you see them posting again.
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