Great thanks to Pete Yurkosky for his investigations -- a truly valuable man. Here are the results:
Due to a bug, the ESRI optimized map service in 10.1 cannot handle nested groups, i.e. GroupElements within a GroupElement. Our signage annotation, with which we have had the non-drawing problem, in most cases is made up of grouped subsets of graphic shapes and text boxes, all grouped together in a single, enclosing GroupElement for storage in the annotation feature. The map service will ignore GroupElements within the overall GroupElement; therefore, if a piece of annotation consists entirely of subgroups all grouped together, then the subgroups are ignored, and the annotation doesn't draw at all. If there are both ungrouped and grouped elements in the annotation feature, only the ungrouped elements will draw. Pete found a simple code fix for this bug and will be registering it to be fixed in the next release (read 10.2).
Thanks again to Mr. Yurkosky.
Cheers,
Ti Crossman
GIS Analyst
Grafton Technologies, Inc.
Newburyport, MA