I got it to work in a round about way.
The block was scaled already by a factor of 96. The Canno Scale was set to 1/8". I had to change the block scale to 1, then change the Canno scale to 1, then change the block settings to annotative by using the block editor. Close the BE and the blocks were visible and touchable. Then change the Canno Scale to 1/8" and then add that scale factor to the annotative block. **Sigh**
Thanks.