Is it possible to define a local struct, within a method, in C#?

I believe it's not permitted to define named types within a method. As to why, I'll have to speculate. If a type is not going to be used outside, then its existence probably cannot be justified.

You can however define anonymous type variables within a method. It will somewhat resembles structures. A compromise.

public void SomeMethod ()
{
    var anonymousTypeVar = new { x = 5, y = 10 };
}

It is a little late but this is my solution for lists - using anonymous vars as the structs inside of methods:

var list = new[] { new { sn = "a1", sd = "b1" } }.ToList(); // declaring structure
list.Clear();                                               // clearing dummy element
list.Add(new { sn="a", sd="b"});                            // adding real element
foreach (var leaf in list) if (leaf.sn == "a") break;       // using it

Anonymous elements (sn and sd) are somehow read only.