Question

Why does ClientBase Dispose need to throw on faulted state?

Answer 1

Probably because you need to Abort it first:

An object in the Faulted state is not
closed and may be holding resources.
The Abort method should be used to
close an object that has faulted. If
Close is called on an object in the
Faulted state, a
CommunicationObjectFaultedException is
thrown because the object cannot be
gracefully closed.

From ClientBase.Dispose doco:

Closes the client object.

You are probably getting CommunicationObjectFaultedException because you are calling Dispose (which calls Close) before aborting. Abort, then Dispose and you should be OK.