diff --git a/src/LanguageServer/Microsoft.CodeAnalysis.LanguageServer/FileBasedPrograms/FileBasedProgramsProjectSystem.cs b/src/LanguageServer/Microsoft.CodeAnalysis.LanguageServer/FileBasedPrograms/FileBasedProgramsProjectSystem.cs
index 01f6754bd709f..bc5dbcb48237f 100644
--- a/src/LanguageServer/Microsoft.CodeAnalysis.LanguageServer/FileBasedPrograms/FileBasedProgramsProjectSystem.cs
+++ b/src/LanguageServer/Microsoft.CodeAnalysis.LanguageServer/FileBasedPrograms/FileBasedProgramsProjectSystem.cs
@@ -137,8 +137,7 @@ public async ValueTask TryRemoveMiscellaneousDocumentAsync(DocumentUri uri, bool
         var content = await _projectXmlProvider.GetVirtualProjectContentAsync(documentPath, _logger, cancellationToken);
         if (content is not var (virtualProjectContent, diagnostics))
         {
-            // https://github.com/dotnet/roslyn/issues/78618: falling back to this until dotnet run-api is more widely available
-            _logger.LogInformation($"Failed to obtain virtual project for '{documentPath}' using dotnet run-api. Falling back to directly creating the virtual project.");
+            _logger.LogError($"Failed to obtain virtual project for '{documentPath}' using dotnet run-api. Falling back to directly creating the virtual project.");
             virtualProjectContent = VirtualProjectXmlProvider.MakeVirtualProjectContent_DirectFallback(documentPath);
             diagnostics = [];
         }
@@ -168,6 +167,7 @@ public async ValueTask TryRemoveMiscellaneousDocumentAsync(DocumentUri uri, bool
             ProjectFactory: isFileBasedProgram ? _workspaceFactory.HostProjectFactory : _workspaceFactory.MiscellaneousFilesWorkspaceProjectFactory,
             IsMiscellaneousFile: !isFileBasedProgram,
             Preferred: buildHostKind,
-            Actual: buildHostKind);
+            Actual: buildHostKind,
+            HasLoadErrors: content is null);
     }
 }
diff --git a/src/LanguageServer/Microsoft.CodeAnalysis.LanguageServer/HostWorkspace/LanguageServerProjectLoader.cs b/src/LanguageServer/Microsoft.CodeAnalysis.LanguageServer/HostWorkspace/LanguageServerProjectLoader.cs
index 5dbc51ba3f3de..e385df3bfadb2 100644
--- a/src/LanguageServer/Microsoft.CodeAnalysis.LanguageServer/HostWorkspace/LanguageServerProjectLoader.cs
+++ b/src/LanguageServer/Microsoft.CodeAnalysis.LanguageServer/HostWorkspace/LanguageServerProjectLoader.cs
@@ -174,7 +174,12 @@ private async ValueTask ReloadProjectsAsync(ImmutableSegmentedList<ProjectToLoad
         }
     }
 
-    protected sealed record RemoteProjectLoadResult(RemoteProjectFile ProjectFile, ProjectSystemProjectFactory ProjectFactory, bool IsMiscellaneousFile, BuildHostProcessKind Preferred, BuildHostProcessKind Actual);
+    /// <param name="HasLoadErrors">
+    /// Whether there were errors in the process of loading the project file itself.
+    /// When this is true, we may still want to proceed with design-time build in order to provide partial information about the project.
+    /// When this is false, <see cref="RemoteProjectFile.GetDiagnosticLogItemsAsync"/> also needs to be separately checked, to decide if evaluation was successful.
+    /// </param>
+    protected sealed record RemoteProjectLoadResult(RemoteProjectFile ProjectFile, ProjectSystemProjectFactory ProjectFactory, bool IsMiscellaneousFile, BuildHostProcessKind Preferred, BuildHostProcessKind Actual, bool HasLoadErrors);
 
     /// <summary>Loads a project in the MSBuild host.</summary>
     /// <remarks>Caller needs to catch exceptions to avoid bringing down the project loader queue.</remarks>
@@ -209,7 +214,7 @@ private async Task<bool> ReloadProjectAsync(ProjectToLoad projectToLoad, ToastEr
                 return false;
             }
 
-            (RemoteProjectFile remoteProjectFile, ProjectSystemProjectFactory projectFactory, bool isMiscellaneousFile, BuildHostProcessKind preferredBuildHostKind, BuildHostProcessKind actualBuildHostKind) = remoteProjectLoadResult;
+            (RemoteProjectFile remoteProjectFile, ProjectSystemProjectFactory projectFactory, bool isMiscellaneousFile, BuildHostProcessKind preferredBuildHostKind, BuildHostProcessKind actualBuildHostKind, bool hasLoadErrors) = remoteProjectLoadResult;
             if (preferredBuildHostKind != actualBuildHostKind)
                 preferredBuildHostKindThatWeDidNotGet = preferredBuildHostKind;
 
@@ -289,7 +294,7 @@ private async Task<bool> ReloadProjectAsync(ProjectToLoad projectToLoad, ToastEr
             }
 
             diagnosticLogItems = await remoteProjectFile.GetDiagnosticLogItemsAsync(cancellationToken);
-            if (diagnosticLogItems.Any())
+            if (hasLoadErrors || diagnosticLogItems.Any())
             {
                 await LogDiagnosticsAsync(diagnosticLogItems);
             }
diff --git a/src/LanguageServer/Microsoft.CodeAnalysis.LanguageServer/HostWorkspace/LanguageServerProjectSystem.cs b/src/LanguageServer/Microsoft.CodeAnalysis.LanguageServer/HostWorkspace/LanguageServerProjectSystem.cs
index 7e86d7845f54d..a1d4c93ba6798 100644
--- a/src/LanguageServer/Microsoft.CodeAnalysis.LanguageServer/HostWorkspace/LanguageServerProjectSystem.cs
+++ b/src/LanguageServer/Microsoft.CodeAnalysis.LanguageServer/HostWorkspace/LanguageServerProjectSystem.cs
@@ -90,6 +90,6 @@ public async Task OpenProjectsAsync(ImmutableArray<string> projectFilePaths)
         var (buildHost, actualBuildHostKind) = await buildHostProcessManager.GetBuildHostWithFallbackAsync(preferredBuildHostKind, projectPath, cancellationToken);
 
         var loadedFile = await buildHost.LoadProjectFileAsync(projectPath, languageName, cancellationToken);
-        return new RemoteProjectLoadResult(loadedFile, _hostProjectFactory, IsMiscellaneousFile: false, preferredBuildHostKind, actualBuildHostKind);
+        return new RemoteProjectLoadResult(loadedFile, _hostProjectFactory, IsMiscellaneousFile: false, preferredBuildHostKind, actualBuildHostKind, HasLoadErrors: false);
     }
 }