Level of Detail isn't a drawing setting, it's a system setting. What happens if you create a brand new drawing? Is it on then? Do you have any scripts or lisp routines that run when you open a drawing?
If you can't figure out what's turning it on, you could always modify your acaddoc.lsp file and add (command "levelofdetailoff").
I wasted an entire day trying to figure out why my drawing would hang everytime I tried to save it with contours displayed.
I finally figured out the culprit. Guess what it was..
Running LEVELOFDETAILOFF solved the problem.
What a frustrating experience.
I swear I have yet to do ANY project in this software that hasn't forced me to spend MANY hours troubleshooting and loooking for solutions to problems.