Spence Watson, a senior CAD operator, sent in this tip for getting wipeouts to display correctly in AutoCAD.
"If you have ever inserted external blocks from another file or a template file, you’ve probably dealt with the wipeouts coming over displayed on top, forcing you to redefine the block after. Perplexingly, the block will work just fine when used in the external file. This problem has to do with the way AutoCAD inserts external blocks compared to internal blocks. Unlike internal blocks, AutoCAD does not use display order when inserting external blocks. Instead, each entity of a block is inserted in the order that it was drawn. This means that most of the time, the wipeout is inserted last and ends up on top of the linework.
"I use the following method to be sure all of my blocks are drawn correctly:
Blockedit the blocks in the template file.
Move the linework a set distance to the right (say, 20 units).
Copy the linework back to the left (20 units).
Erase the linework to the right.
This will ensure that the wipeout was drawn last and will insert correctly in new drawing."
Notes from Cadalyst tip reviewer R.K. McSwain: Although I cannot recreate this issue in AutoCAD 2014, wipeouts and draworder have historically had issues, and this is a good workaround if you encounter problems. Way back in the day before draworder, this was the way to force display order, essentially using entity creation order to control display order. It's still a valid method, as described here.