Michelle,

When your custom activity first executes a method in the PDFSharp assembly the .NET framework will  attempt to load the correct version of the PDFSharp assembly from the GAC, failing that it will attempt to load it from the folder structure that contains your custom activity assembly.

So the quick answer is to just place the PDFSharp assembly in the same folder as your custom workflow assembly.  The good news is that the PDFSharp assembly does not have any other dependencies so you should be good to go.

Not sure how you are deploying your custom workflow activity but if you are going to do a lot of installations or make your custom activity publicly available then you should probably invest the time to add a setup project to your solution to automate that process.

Finally, not sure where you are placing your custom activity assembly on the workflow server but I tend to place mine on the boot drive of the workflow server in a fairly shallow folder structure that I can be sure the service running workflow will have access to.