I would have upload a .zip with the project, but since I can't ... hope this helps and let me know if you have any questions.  Hopefully you'll be able to decipher this.

protected override void OnStart(string[] args)
        {
            this.AutoLog = true;
           
            List<DirectoryInfo> dirs = (new DirectoryManager()).GetDirectoryList();
            FileSystemWatcher fsw;
            foreach (DirectoryInfo info in dirs)
            {
                EventLogMgr.Write("Adding watcher to: " + info.FullName);
                fsw = new FileSystemWatcher(info.FullName);
                fsw.Created += fsw_Created; 
                fsw.EnableRaisingEvents = true;
                _watchers.Add(fsw);
            }
        }

 protected void fsw_Created(object sender, FileSystemEventArgs e)
        {
            try
            {
                SmtpClient smtp = new SmtpClient(ConfigurationManager.AppSettings["SMTPServer"]);
                System.Net.Mail.MailMessage msg = new MailMessage();
                msg.From = new MailAddress(ConfigurationManager.AppSettings["MailFrom"]);
                msg.To.Add(new MailAddress(ConfigurationManager.AppSettings["MailTo"]));
                msg.Subject = ConfigurationManager.AppSettings["MailSubject"];
                msg.IsBodyHtml = false;
                msg.Body = "The following file failed to be imported by the Laserfiche Import Agent: " + Environment.NewLine + Environment.NewLine + e.FullPath;
                smtp.Send(msg);
                EventLogMgr.Write("Import Failed: " + e.FullPath);
            }
            catch (Exception ex)
            {
                EventLogMgr.Write("Error! " + ex.Message);
            }
        }

  public static class EventLogMgr
    {
        public static void Write(string Message)
        {
            string source = ConfigurationManager.AppSettings["EventLogSource"];
            string log = ConfigurationManager.AppSettings["EventLogName"];
            if (!System.Diagnostics.EventLog.SourceExists(source))
            {
                System.Diagnostics.EventLog.CreateEventSource(
                    source, log);
                Thread.Sleep(5000);
            }

            EventLog eLog = new EventLog();
            eLog.Source = source;
            eLog.Log = log;
            eLog.WriteEntry(Message);
        }
    }

 class DirectoryManager
    {
        private XmlDocument _xDoc = new XmlDocument();

        public DirectoryManager()
        {
            _xDoc.Load(ConfigurationManager.AppSettings["DirectoryConfigFile"]);
        }

        public List<DirectoryInfo> GetDirectoryList()
        {
            List<DirectoryInfo> result = new List<DirectoryInfo>();
            DirectoryInfo dInfo;
            XmlNodeList nodes = _xDoc.SelectNodes("directories/directory");
            XmlAttribute attr;
            foreach (XmlNode node in nodes)
            {
                attr = node.Attributes["value"];
                if (attr != null)
                {
                    dInfo = new DirectoryInfo(attr.Value);
                    if (dInfo.Exists)
                    {
                        string[] directories = Directory.GetDirectories(attr.Value.ToString(), "IAError", SearchOption.AllDirectories);
                        foreach (string s in directories)
                        {
                            dInfo = new DirectoryInfo(s);
                            result.Add(dInfo);
                        }
                    }
                    else { 
                    
                    }
                }
            }
            return result;
        }
    }

==== DirectoryList.xml ===========

<?xml version="1.0" encoding="utf-8" ?>
<!--Add the ROOT directory only.  The service will traverse subdirectories and any \IAError directory will be monitored-->
<directories>
  <directory value="E:\DMS_Queue\Input\"></directory>
  <directory value="E:\DMS_Queue\Test\"></directory>
</directories>

This is very kind of you.  I will look over this.

Anthony