Earlier this year I was able to do this, but now as I'm trying to add some new centerlines in my data, I cannot open the DGN files in ArcMap. My ESRI software hasn't changed versions, so I'm unsure what's really causing this.
Does the dgn file have a projection file and/or is the projection extents way out? This have been two main issues we run into when using dgn's.
If you have microstation, you can try opening the file in microstation and clipping a smaller data area to use in the arcmap or possibly add a projection to the file.
Hope that helps
I got it working. Ended up being something that was corrupted with my install.