Hidden Line display in SS3

I just got SS3 today because the True Hidden Line feature in SS2 doesn't really work. So I am trying to use the new 'Cached Visible Edges' feature. It works fine, except that I can't figure out how to make it display my hidden edges.

There is a little button in the reference dialog box which is supposed to turn off and on the display of hidden elements, but it doesn't work for some reason - when I hover over it it says, "Display Hidden Elements valid only when Cached Elements are Hidden. So, why aren't any of my cached elements hidden? There were lots of elements in the reference which should have ended up hidden, but instead just went away when I set the Visible Edges of the reference to 'Cached'.

Once I solve this, I will have won a 4 day battle to get this drawing to look how it is supposed to. Tech support wasn't able to solve it yet, I sent the files to them a while ago. I will update this if they figure it out.