You could make the larger viewport a 'polygonal' viewport, that has a cutout where the smaller viewport overlays it. At some point the larger viewport wraps around the smaller, buts together, to give a continuous view.
Kind of hard to describe in words, a picture would explain it but no time for that right now...
Here's another way to do it, posted by Cad64 in another forum:
This is what I would do:
Create a WIPEOUT, in paper space, over the area I want to block out.
Move the table from model space to paper space, scale it down and position it over the Wipeout. Be sure to turn off the wipeout frame after you get everything set.