"Side-by-side configuration is incorrect" when trying to install MS DirSync tool

Apologies if this is the wrong thread, but it seems like every thread is the wrong thread for this one :)  Yes, I've checked all the other "side-by-side configuration" threads, but none of them seems to apply to this case.
I have a SBS 2012 machine, acting as DC, AD DS and DNS, and our organization has recently signed up for Office 365 Online E1, and we've migrated our mail there.  Everything is set up, but now I'd like to sync our AD with MS Online.  I enabled directory
sync in the admin user and group controls on the Office 365 site and as per instructions, I downloaded the latest version of DirSync from here:http://social.technet.microsoft.com/wiki/contents/articles/18429.microsoft-azure-active-directory-sync-tool-version-release-history.aspx.
However, when I try to install it on the server, I get this error message:  "The application has failed to start because its side-by-side configuration is incorrect. Please run sxtrace or see the application event log for more detail."
Sxtrace gives the following results:
=================
Begin Activation Context Generation.
Input Parameter:
Flags = 0
ProcessorArchitecture = AMD64
CultureFallBacks = en-US;en
ManifestPath = N:\temp\dirsync.exe
AssemblyDirectory = N:\temp\
Application Config File = 
INFO: Parsing Manifest File N:\temp\dirsync.exe.
INFO: Manifest Definition Identity is (null).
ERROR: Line 0: XML Syntax error.
ERROR: Activation Context generation failed.
End Activation Context Generation.
Things I've tried:
Other posts seem to indicate that it's often an issue with missing visual C++ libraries, but I installed both the 2008 and 2010 C redistributables for x86 and x64, and nothing has changed.  
One solution for a similar message had a typographical error in an xml configuration file, however in this case the "Application config file" field is blank.  
As several other (non TN threads) around the 'net recommend, I ran SFC.  It appears to work for others with the same error message.  It fixed some issues and spit out a huge log file, but the problem persists, and I don't know where in the log
file to look, assuming anything in there is relevant (the file is over 700kb, so I'm not going to start spamming big chunks of it just yet unless I know what to look for).
The problem seems to come up in the context of software development (another thread on this subject is about the user developing an application from scratch) but I have no background in software dev, and this is supposed to be an official tool from Microsoft,
for crying out loud, not some homebrew thing I'm putting together.  
This one issue is keeping us from moving ahead with our entire plan for user access, so any help would be
much appreciated. Thanks!!!

Hi AGrush,
Based on your description, did you mean that attempt to install Microsoft Azure Active Directory Sync tool
on Windows Server 2012 Essentials?
The Azure Active Directory Sync tool should be installed on a computer which isn't a domain controller. For
more details, please refer to the System requirements in the following KB.
How to troubleshoot Azure Active Directory Sync tool installation
and Configuration Wizard error messages
In addition, I’m a little confused that why install DirSync (That is what the Windows Server Essentials Office
365 integration is for) on Windows Server 2012 Eseentails.
Manage Office 365 in Windows Server Essentials
If anything I misunderstand or any update, please don’t hesitate to let me know.
Hope this helps.
Best regards,
Justin Gu

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