I spent well over an hour on Friday with this one and gave up.  I spent almost another hour today working on this.  I almost gave up, but when I’m in learn-mode like I am with Silverlight, these types of issues can really teach you a lot if you see them through.  I had a ComboBox with bindings on it’s ItemSource and SelectedItem like so:

            <ComboBox Name="ComboBoxControl" Style="{StaticResource ComboBoxStyle}"
                SelectedItem="{Binding Path=SelectedOption, Mode=TwoWay}"
                ItemsSource="{Binding Path=Options}"
                IsEnabled="{Binding Path=IsReadOnly}"
                Foreground="{StaticResource SemiDarkTextBrush}"                    
                Height="22" Width="150" Grid.Column="1" Margin="30,0,10,0" HorizontalAlignment="Stretch" >
                <ComboBox.ItemTemplate>
                    <DataTemplate>
                        <TextBlock 
                            Foreground="{StaticResource SemiDarkTextBrush}"                    
                            Text="{Binding Path=Label, Mode=OneWay}" 
                            TextWrapping="Wrap" />
                    </DataTemplate>
                </ComboBox.ItemTemplate>
            </ComboBox>

I put breakpoints in my model’s SelectedOption property and I could see Silverlight calling it.  So, I knew there were no hard binding errors.  The bindings were working, except… they weren’t.  The ComboBox always showed up with no selected item.  I kept plugging away, and by accident I discovered the order of the binding occurrences matter.  Changing the markup to define the ItemsSource binding before the SelectedItem binding solved the problem.  Like so:

            <ComboBox Name="ComboBoxControl" Style="{StaticResource ComboBoxStyle}"
                ItemsSource="{Binding Path=Options}"
                SelectedItem="{Binding Path=SelectedOption, Mode=TwoWay}"
                IsEnabled="{Binding Path=IsReadOnly}"
                Foreground="{StaticResource SemiDarkTextBrush}"                    
                Height="22" Width="150" Grid.Column="1" Margin="30,0,10,0" HorizontalAlignment="Stretch" >
                <ComboBox.ItemTemplate>
                    <DataTemplate>
                        <TextBlock 
                            Foreground="{StaticResource SemiDarkTextBrush}"                    
                            Text="{Binding Path=Label, Mode=OneWay}" 
                            TextWrapping="Wrap" />
                    </DataTemplate>
                </ComboBox.ItemTemplate>
            </ComboBox>

Wow, that’s pretty nasty.  I’m lucky stumbled on the solution.  I consider this a bug.

Hope this helps someone else out there