Ahh, when you said "my DLL" I presumed you'd written it.
.NET apps will look first in the GAC for a DLL and then in the bin folder. See
http://groups.google.com/group/microsoft.public.dotnet.framework.aspnet/browse_thread/thread/5eac976e91a5547a/44ee27d9289841f7?lnk=st&q=assembly%2Bsearch&rnum=1 if you want a more detailed description of the search order.
So I think that your assembly not being in the GAC might be a red herring...
Can you provide the full error message that the application returns?