Lunar Magic will generally display a transparent version of the block. Check if you didn't have them disabled under View > Other Invisible Objects or press 9 in the level editor.
For custom Map16 tiles, you have to use DSC files instead. If you don't use GPS, you have to generate an empty DSC file (just a text file with a specific extension). If you do use GPS, put at the end of the block list a
. You need to add the following in the DSC / at the end of the block list:
where xxx is the Map16 tile whose appearance you want to change and yyy the source graphics.