Levels not reading from DGNLIB

Hi

I'm using a custom workspace and have just installed ORD update 3.  Now when I create a new dgn, it is not reading the levels from the feature definitions DGNLIB.  It find the feature definitions, symbologies and element templates fine.  And when I draw a feature, the level is then brought into the file.  But the next problem is that none of the level settings are carried through, eg colour/linestyle etc.

Any ideas on how to fix?