Well, I rolled back to VS2010 with Windows Phone SDK 7 and that seems to work with Windows 8 :)

You said it's a desktop application, so why do you need Windows Phone SDK, and why are you creating a Windows Phone Game project type?

You need the Windows Phone SDK when developing with MonoGame because that's how Microsoft ships XNA these days; XNA doesn't come in it's own standalone library.

MonoGame requires an XNA project to convert texture/effect/sound (stored in an XNA content project) in to the appropriate file format - there is an MonoGame content pipeline being built, but for the moment XNA is still required (as far as I'm aware).

The Windows Phone Game project is the only project type that I could find in the Windows 8 SDK that you can tie a content project to (through a content reference). Building the Windows Phone Game project runs all of the assets in the content project through the asset converters, leaving you with files that MonoGame can load through it's content loader.

Unfortunately Windows Phone Games don't support custom effects, so that knocks out a significant proportion of my content pipeline