Switching off layer in smart object causes it to move in photoshop

Dear all. I am stumped. I have piece of packaging artwork that I’m using in my 3D software.
Smart Objects are great for this as all I have to do is go to Photoshop, double-click the Smart Object, then in Illustrator turn off the layers I need etc and update the Smart Object back in Photoshop and save back out for my 3D software. Only problem is that when I switch off the layer in illustrator and go back to Photoshop to update, the Smart Object jumps half way up my Photoshop file as if I’ve moved it but it also crops it so I can’t even just move it back down as there’s nothing there when I do.
The layer I’m switching off (not deleting) is the die cut for a pizza box, it is still in the Smart Object just not visible. I have tried this in both CS3 and CS4 and it happens both times. I have searched everywhere on the internet for similar problems but can’t find an answer which makes me think I’m doing something wrong. Although I’ve used Smart Objects many times before and this has not happened. I have attached some screen grabs to help with the explanation.
Any help would be greatly appreciated.
Icegiant.
My specs are CS3 (and CS4)
MacPro 2 x 2.8 Quad Core Xeon,
4 GB ram,
512 mb graphics card,
Mac OS 10.5.6

You need to set up an invisible Bounding Box in the Illustrator file. This will be outside the Die cut. This Cropping area can be defined as a Cipping Mask. In Illustrator Object/clipping mask/Make - Command 7. I haven't really experimented with the ins-and-outs of this, and it may also be possible possible with a simple transparent bounding box. But the clipping mask (different to Photoshop Clipping Masks, same term, completely different function),always seems to work in keeping the defined area from moving when you update the Smart Object
Its happening because the outside perimeter of the Smart Object is changing somehow when you delete the object. Photoshop always defines how its going to sample/render the Smart Object based on this perimeter.

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