I have created a small test application that puts a gui around the FMU SDK (found here) and my application can successfully open and run both the co-simulation FMUs provided with the SDK and the model exchange examples with no problems. When I create a FMU from Dymola 2016 FD01 of the Modelica_Blocks_Examples_PID_0Controller example and try to run it in my test application I get an exception on entering the initialization mode.
All the logging is provided in the screen shot below. I'd be glad to show any code but it is primarily the code in the SDK that is running. What could be different about the implementation of the SDK examples and the Dymola FMU implementation that is causing this error?