Beating the Dead "INSERTION SCALE" Issue

[bowlingbrad]

Auginauts,

I have a dynamic block drawn in Architectural Units.
I insert it into a Metric Units drawing.
The block comes in with a correct unit factor of 25.4.
The problem is that it is scaled at insertion so that the X, Y and Z scales are 1 / 25.4.

What is causing this? I thought I have the whole INSUNITS thing figured out and then it bites me in the behind.
I swear this was working during my testing of 2012 ACA.
ARGH!

[bowlingbrad]

Additional info...
I created a brand new block. 1x1 rectangle in Architectural units. From imperial blank template.
I started a new drawing from blank metric template and inserted the block.
Viola! It works. I know I'm not THAT crazy.
Now, why is it doing that to my dynamic blocks?????

[bowlingbrad]

Get this...

I insert the Arch Unit dynamic block into the 1x1 rectangle dwg that I inserted into a Metric file.
I now insert the 1x1 block with dynamic block into a blank metric file and it is SCALED DOWN AGAIN!

[bowlingbrad]

Don't know what happened but I will have to remake the blocks and start all over.
The only thing that changed was I installed Service Pack 1.