Bruce,
My host app is basically the example 59 with some very minor tweaks. So, I took the multisite host example (59) and added SelfService to it. That app also refused to start as a service - with the same error.
But, starting them as regular exe's and then clicking the "Install & Start As Service" button did cause them to be installed as a service (they show up in Service Manager). But, they fail to run.
Finally, I went back to my regular NT website app and added SelfService. It installed and ran just fine using /iss.
It seems there is something in the multisite host app that just won't run as a service. Perhaps it could be a Windows 8 issue? It would be great if someone else would try adding SelfService to the example app (multisite host (59)) and running it as a service.
Using Windows 8.1, NT 8.18, SelfService 3.43, StringTheory 2.08, and WinEvent 3.86