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Hi all,
The easiest way I found to deal with the ACAD PROXY ENTITY problem is just to select the item and type explode.
After that you will be able to copy or edit as normal.
My method: Using the WBLOCK command, create a new file containing all the entities of the file in question, using 0,0 as the insert point. What this does is take everything but the Proxy Entities and create a new file with them, as the proxy entities are unable to even be copied. Close the original, and open the new file and you will have your file, minus all the proxy entities.