John,
The next update of TS will fix this problem. Unfortunately there is not much you can do until this update except to avoid copying when LV DLLs are loaded. I think you may also encounter a problem if you try copying a step and then executing a sequence that calls a LV DLL.
While perhaps not very useful, the details of the cause when copying a step and then trying to run a sequence that calls a LV DLL are as follows. Deadlock occurs because TestStand loads the LV dll in an execution thread, then when it is done the execution thread goes back into teststand's thread pool and starts processing window messages, this causes the LVRT dll to start doing it's initialization which in part involves calling GetClipboardData which attempts to send a message to the m
ain thread of the sequence editor (the one that registered the clipboard data), however the main thread of the sequence editor isn't processing messages yet because it is trying to create an execution and allocate a thread from the thread pool and happens to try to be allocating the same thread that is running the LVRT dll's initialization code so it is effectively waiting for the thread that is waiting for it resulting in deadlock.
