Than You for responding to my questions. Changing the proj lines to normal lines at least lets you move on and allows the use of a profile for extruding.
It should have been stated as two questions. The first question was a selection question when trying to close a loop of normal lines, not reference lines. Its possible the projected ref lines are messing up the selection process, but I even tried closing a loop on a sketch plane (ie only in a assembly iam.drwg) with all the projected geometry deleted. Pick line, rmb,close loop, and the it wont allow seleting the second line, allthough it will pick other lines in the asembly that are not even on the sketch plane. The same procees works fine in a part drwg.
Changing the ref lines to normal lines, deleting the problem lines and drawing new lines on the end points
gets a profile that can be extruded, but I still cant close the loop. It seems that in some cases projected geometry should not be used.
From reading the posts, some people chg the ref lines to normal lines and others draw regular lines over the ref lines and use constrain lines to be colinear (it does not seem to like pts) to get a working profile for extruding.