When an object has flag 68 (4 = transparent, 64 = no z buffer) it should not be an opaque model, so you will always want to have an opaque base model for the main terrain and a secondary model for the terrain alpha blend. I am not sure if you need separate models for each blend when using multiple layers, but it is worth trying merging all alpha blends into 1 blend model (though, still separate from the base model) and see if that works. I suspect it works but you may run into some render order issues.