@KaiBawcom the conversion from ECEF to LLA will be giving you a height above sea level so the correct mode for an aircraft flying in the air is ABSOLUTE. For an aircraft if you use RELATIVE and fly over a mountain, then the path followed will look very odd and would be completely incorrect.
As you have seen if you have an asset on the ground and there is an inaccuracy in either the calculated altitude or indeed the terrain data, it is possible you end up with a location disappearing underground. Although it might not be desirable for your application this is expected behaviour as we also need to support sub-surface items such as the location of things underground, or maybe submarines beneath the water for example.
You've come up with one solution to check the height of the terrain and fudge the altitude, but this sounds messy and may not scale very well once you've got many thousands of items on your display. If you've only got a few items it might be okay, but we wary of this solution.
Another option you could consider if you have a way of detecting if something is on the ground (a vehicle or an aircraft which you know is landed), is to use DRAPED_BILLBOARDED. This basically ignores the Z value and just fixes an item to the ground regardless of the terrain.
Without fully understanding your application its hard to give you a definite solution, but hopefully I've helped with telling you about the options.
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