If you have access to Microstation, the best way of bringing DGN files into Navisworks is to export from Microstation as an NWC using the Microstation export plugin. The Microstation export plugin has access to the Microstation API and is able to handle complex elements that the reader has trouble with.
You can do a DGN to NWC conversion using Microstation via the command line, so the process can be automated. Navisworks comes with a sample perl script for converting a whole directory of DGNs.
There is no additional logging for the DGN reader that will show the location or element IDs of failed elements.
Tim Wiegand
Software Architect