I'm also struggling with this one.
One problem I'm finding it that there is no built in XSD validation and further more, with an XSD set to LinqToXsdSchema in the properties, you cannot set it to embedded resource.
So the avenue of loading schemas out of the assembly for validation is out too.
My only current idea is a messy one.
Create a seperate project, add in all the XSD files as linked existing items (drop down the Open button when adding an existing item) and set THEM to embedded resource.
Then the primary assembly referenced the resource assembly and uses them to do validation.