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Opening a query layer defined with Oracle spatial (SDO) with Z values fails to display in ArcMap.
Attempting to create a query layer and displaying the layer in ArcMap fails when the spatial attribute has a three-dimensional spatial index. ArcGIS uses a two-dimensional search geometry as input when executing spatial queries in ArcMap. Because the input search geometry is 2D and not 3D, the query fails with a type mismatch. This causes many of the operations in ArcMap to fail, such as panning, zooming and identify.
This issue has been fixed in ArcGIS for Desktop version 10.1.