DLfrmHLL, try re-loading the terrain as I told you before. Also, delete the folder named after your terrain in the C:\Program Files\HTC\ah2editor\cache\ folder. That way if you changed anything that was custom, it will update that. But remember, after you exit the TE, you WILL have to use the "re-load terrain" method to get custom objects to appear again.
Yes, I know, very confusing, very bad bug too.