You should be able to start with the blocks you already have in your "current library". (I assume from your description that these blocks are individual files.) With Dynamic Blocks, things tend to work better if you create a "template" or "container" drawing to hold several DBs, maybe grouped based on categories that make sense in your discipline. A container drawing file would contain the block "definitions" (and one insert of each, for reference). You should be able to create one pretty quickly by starting with a blank drawing and simply inserting a copy of each block you want to make into a DB. (Make sure you don't explode on insert, because you want the block definitions, not just the entities.)
Now use BEDIT to make each of these formerly "static" blocks into DBs. Adding visibility states is actually one of the simplest aspects of DBs. (See Help for guidance.) Make sure you include a visibilty state for "all visible" for editing purposes.
Once you have a DB defined in this container drawing, test the DB by inserting it into another drawing. Don't insert the entire container drawing, just the block within it. Design Center comes in very handy for this. (You can also create a Tool Palette with a block insert command - again, see Help.)
By the way, there is a Discussion group dedicated to Dynamic Blocks. You may get more (and even better) help posting there.
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