I have a desktop application which contains an App.config (program.exe.config at release) with clearly visible elements which define my WCF endpoints and WCF implementation.
I'm guessing option 1 is probably your best bet. That said, I do wonder if it's worth it (assuming you don't have anything really sensitive on the config file, like credentials or anything else). Reason I bring this up is that, if you're concerned about your endpoint URLs and such, well, anyone with very basic tools can figure that out in a few seconds using a network protocol analyzer.