I had the same problem using VS2010.
I know this isn't really an answer. I just thought it might help someone.
I resolved it by using the fully qualified name for DBContext.
Instead of
public class MachineDbContext : DbContext
I used
public class MachineDbContext : System.Data.Entity.DbContext
and rebuilt the project. Suddenly VS was happy, and I was even able to remove the fully qualified name, and just use DBContext.