I was thinking about how to secure the Data Layer in a C# Application, the layer could in this case be either a LINQ to SQL Model Diagram stored with the Application itself
Shiraz Bhaiji came close, but I think they missed the key step.
Yes, you want access to the database to be mediated by a middle tier, exposed through WCF, which imposes whatever business logic you require, including full access control. This service does have the connection string that you want to keep secret, but it's not accessible to the WinForm clients.
The key step is that the client uses the user's authentication to gain appropriate levels of access, and never has any ability to contact the database or even get full control of the middle tier. The middle tier grants access to methods based on the groups that the client user is a member of. This means that a user with low security can call any method they like, but they'll get access denied exceptions, or data filtering, or whatever other failure mode is appropriate. The user account, on its own, has no access to the database, so the middle tier can do whatever it likes.
The obvious way to bypass this would be for the client to use the account of someone with full access. Of course, if they could do that, they'd already have what they wanted.
Hopefully, this approach would be useful in solving your problem.
edit
This solution does not allow LINQ-to-SQL in the client, just the middle tier. If that's a dealbreaker, then this isn't for you. Then again, the moment the client can access the database directly, a gigantic security door is opened up, and it's hard to close. There's a huge amount of extra work involved in securing the database itself so that it provides the sort of user-based, row-level security that comes naturally from a three-tier solution. I would generally recommend against it, although I do recognize that there are times when it is entirely appropriate.