If you want to have a '3rd party content library' you should move it out of the 'My Library folder' to the same level as the My Library and add it as a second library through the Content Directory Manager in DS. You also do not want to have a setup where you have 1000 different libraries all nested under your main library, DS is just not designed to handle content in that fashion. the 3rd party content folder is the nested folder and should not be placed within the current My library folder. Nesting is basically libraries within libraries. Each library should be its own top level and not have additional libraries stored within it. Products should be merged into existing libraries, and not added as individual libraries unless specifically required as such, this will help keep your library efficient and make content easier to find in DS.

Also figure morphs should be installed to the same directory as the figure or expect to see issues.

Maybe a picture would help :)

It would be awesome to have a sticky explaining correct installation of Renderosity DS content in this forum! ;)