Contour z-value flipped

I'm using ACAD 2008. I have a large (37 square miles) .dwg topo data set converted from Microstation's .dgn (v8) to .dwg. The contours are all polylines, and are all assigned a z-value co-ordinating with the contour elevation. When I 3d orbit around the topo map, all the contours appear correct relative to each other. However, when I query the attributes of the polylines, generally every other segment has a negative z-value, i.e one polyline segment has a z-value of 500, the next a value of -500. Every negative-value contour is exactly 1000 units below the positive-value segment. This matters because I am trying to import small portions of this topo into Sketchup. To do this cleanly I need to join all the polylines of equal elevation together in Autocad. However, acad won't allow me to join (via pedit) the segments, because it thinks they are non-coplanar. If I edit the attribute of the negative-value contour to the correct positive value, the lines still won't join, and, the edited contour then appears 1000 units below the positive-value contour when viewed and measured in perspective. Very strange. The z-values appear correctly in Microstation. It seems obvious to me that the conversion is at fault here, right? Is there a way to correct this in ACAD? I've looked at all the conversion settings in Microstation, and can find nothing that would impact z-axis. I googled this 600 different ways, and have come up with nothing. Any help would be so appreciated - I might send you a flower.

I'm not sure if this command was available in 2008, but have you tried flatshot?

I'm not familiar with it, but it is available in 2008. After reading up on it, I'm not sure how it would help my situation?

Could you upload the dwg?

To make all polylines z=0 (if you want that if I understood), type "change" in command line, in select objects hit "ctrl+A" (to select all), then "P" , then "E" then "0 (zero)". After each command hit "enter". (Create copy of file)