The Wix library project does not support heat's HarvestProject in wix2010.targets.
The ConvertReferences target has the following condition:
('$(OutputType)' == 'Package' or '$(OutputType)' == 'PatchCreation' or '$(OutputType)' == 'Module' )
Library's should be supported as well, in our case we bind files to a wix library and pass it down the chain where the c# project is no longer available but still want its outputs for an installer.
There is a discussion on this matter a year ago however I never go around to lodging a bug.