I have a Powershell script that calls a method in a C# library. The library dll is loaded as:
[Reflection.Assembly]::LoadFrom(\"$automationHome\\dll\\abc.dll
A couple of ideas:
Does the reference to xyz.dll from abc.dll (add reference) have the specific version property set to true (default setting) and you are using a later version of xyz.dll?
For some assemblies the only way to get them to work is o load them into the GAC. You may want to try loading xyz into the GAC.