Thanks for the information. I have tried what was suggested and believe that
I am still missing something.

I added the following code group to my config file. As you can see it is
set to "FullTrust".

<CodeGroup class="UnionCodeGroup"
version="1"
PermissionSetName="FullTrust"
Name="FOCUSCodeGroup"
Description="Code group for my data processing extension">
<IMembershipCondition class="UrlMembershipCondition"
version="1"
Url="D:\Program Files\Microsoft SQL Server\MSSQL.2\Reporting
Services\ReportServer\bin\MyDataExtension.dll"/>
</CodeGroup>


I tried the following two approaches in my assembly:
1)------
EventLogPermission elp = new
EventLogPermission(System.Security.Permissions.PermissionState.Unrestricted);
elp.Assert();
elog.WriteEntry(loc + " --- " + msg, entryType);

2)------
EventLogPermission eventLogPermission = new
EventLogPermission(EventLogPermissionAccess.Administer, ".");
eventLogPermission.PermitOnly();
elog.WriteEntry(loc + " --- " + msg, entryType);

(#2 came from: http://support.microsoft.com/?kbid=918122)

During execution both prompted me for authentication when the exception was
thrown and never wrote to the event log. Any ideas as to what I could still
be missing?

I was able to resolve the problem by first creating the EventSource on the
server itself. The problem was caused by the creation of the source... NOT
the writing to the log itself. Once the souce was create manually (in the
registry) I was able to write to the log successfully using the
configurations provided earlier. Thanks for the help.