Did you find a solution for this?
I have the same problem.
Hi Jonathan / Gwen,
For some reason labels are enabled at the map service level rather than for each individual layer so therefore if you add the whole service to your Silverlight App then the labels should appear and turn on/off with the layer. If you add the layers individually then the labels will not appear and as far as I am aware there is not an option to turn them on. An alternative work around is to convert the labels to geodatabase annotation and then they can be added as a layer in their own right.
Hope this helps
Tim
Label only shown when a mapservice is added to the map
Labels not visible when feature layer is added
Add both a feature service and a mapservice. Call the mapservice "labels" in the table of contents. Its a clunky workflow, but that's what I do.