Solved! Go to Solution.
You should be able to download the installation files from the customer care portal:
http://resources.arcgis.com/en/help/main/10.1/index.html#//018t00000010000000
You will need the feature class stored in SDE in order to create a feature service.
To confirm, a direct connect is sufficient for a feature service - as long as the database supporting the feature service has the SDE tables within it, correct?
I think the length and complexity of this thread make a VERY good case for someone overhauling BOTH the ArcSDE and ArcGIS Server installation documentation.
http://forums.arcgis.com/threads/85096-Deprecation-plans-for-10.1-and-10.2
"ArcGIS 10.2 will be the last major release to include the ArcSDE application server. Esri
encourages those that have deployed an ArcSDE application server to move to new
database connections introduced in 10.1 as part of their next upgrade."