Lookup Field order

What that log message means is that Lists/FavoriteSites does not exist in either the site collection root site or the site where the feature is being activated (if the latter is a subsite).

If Lists/FavoriteSites is being created by a feature, then make sure that it is activated before your Fields feature. Put the ListInstance element right above your Field element if you have to. But the message is clear: the list does not exist at the time that your custom field is being provisioned to the site collection. And that is why it is not working.

To be clear, the list has to exist at the time that the feature is activated, not just when you create a list instance that will use that field.

P.S. I found this by checking the "documentation" for the Microsoft.SharePoint.SPFieldElement.PerformFixUpIfLookUpField method.

It is not possible to create a lookup field for a choice (dropdown) field. There are two ways to resolve your problem: The programmatic approach and the workaround.

The programmatic approach involves an creating event receiver to do the magic - pretty work intensive. But there is an explanation here:

• Sharepoint 2010 - How to use List Events to Set a Column's Value using Visual Studio 2010 (C#)

You can also just create another list, containing your choice field values and use a calculated field as a source for your lookup column. Check out the following explanation:

• Using a lookup field on a choice field workaround