I am not even sure how to explain what is going on because I don't even know. It appears that once I bring in an xref from another firm, I cannot not get it to display properly on screen. It was working on a previous drawing and now it doesn't. I know this explaination isn't very clear so I have attached two files that are print screens of my model space and my paperspace. Any insight would be greatly appreciated as I have struggled all day with this.
As mentioned. It's a scaling issue. The scale in your viewport are displaying the Labels at a huge height. It looks like your MS scale is 1:1000 and your Viewport scale is 1:000039.
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