I will tell you how to do what you want to do, then I will tell you how I recomend doing it. First of all, you could use "AMCOMBINE" to combine parts in a child sub-assembly but it will not work in a parent sub-assembly. By parent sub-assembly, I mean a sub-assembly can have additional sub-assemblies in it (2 or 200, whatever) Also, a part cannot be combined with another of the same part in a sub-assembly. Probably the fastest way to do what you want would be a three step process. First in MDT, use "ACISOUT" and select all of the parts, and save it to a file. Next, open regular Autocad, and use "ACISIN" to bring in the file you just made. Now use "COMBINE" to combine all the parts into one. These 2 ways will not meet the end result requirements. The first option I mentioned is limited, and the second option I mentioned does combine all of the parts, but the file you end up with will be about 20% BIGGER than what you started with. Also, Autocad 2000 & 2002 makes it much easier to modify solids.
If you want 3D images, first apply materials to the parts, then choose a view you like, or rotate it as to how you like it, then render it using the photo real option. Next use "SAVEIMG" and save it as a .bmp, .tif, or .jpg. I said use render, because if you just use shade (gouraud, etc.), the image will be saved as a 2d wireframe.
If you just need 2D images, then prepare a layout the way you like it (however they need it), then use "AMVIEWOUT" and save the file. Now the file will be about 80% SMALLER than the original drawing, and can be opened in reqular autocad. The file will be editable, but I guess I can't meet all of your requirements 100%.
By the way, You didn't mention which MDT you were using, but I hope this helps.
Flores