Well after SP2, no MvParts will generate hidden lines for me. Now, only the MEP objects (pipe, duct, conduit, etc.) interact with each other in regards to display representations. I'm pretty sure this is on the list of things that will be resolved in the next release. I'd be ecstatic if they could just issue a hotfix for the problem, but I'm sure it's not likely to happen.
I'm in ABS07...I have heard that some MvParts require their top view and/or symbolic view to either be above or below the rest of the blocks in order for them to hide, or be hidden by duct or pipe. It was quite awhile ago when I heard this.
You might try moving your top view or bottom view blocks inside of your MvPart dwg and seeing if that helps.
The problem is a known issue in MEP 2008 and was supposedly fixed in 2009. This is what I was told by Autodesk Support:
Workaround: "...place a small piece of pipe along any part of the Mvpart that should be hiding the objects underneath. The small pipe would cause the objects underneath to display hidden lines as expected. The "temporary" pipe could then be placed on a non-plot layer."