By definition, what you want to do is conditional compilation. Therefore, you cannot check against a global variable other than what is stored in the conditional compilation arguments.

What you need to do is put something like blnGoodProject = 1 as a conditional compilation argument. You could then have:

#If blnGoodProject = 1 Then
Set objItme = New clsItem
#End If

Unfortunately, since conditional compilation only allows boolean values (whatever evaluates to true and false), you can't really have a Select Case statement either in your code. Not that there is a #Select Case... statement anyway.

BTW, please do not do this:

#If Not blnGoodProject = 1

Not is a bitwise operator, this will not evaluate properly. Do a blnGoodProject <> 1 instead.