Can't move Reference Files

I am having an issue with moving reference files in V8i, SS2.

When I try to move/rotate the reference file it says 'reference geographically reprojected, can't be user transformed' even though the orientation is set to coincident, in fact I changed the orientation and tried all of them still no luck.

I tried to create a new file from my seed file, and merged the reference file in and referenced this new file, it will let me move it a few times but a day or so later, same thing. It stops letting me do anything with it.

Anyone have any ideas?  

Thanks!

Phil