The problem is caused by a logic problem introduced at ArcSDE 9.2. To understand the cause of this problem, the concept of the image origin and the block origin must first be understood. During the creation of the raster dataset these two points of origin are established within the raster dataset's metadata.The image origin is the coordinate reference point of the raster dataset. It is set to the upper left coordinate raster dataset's extent. The image origin moves as raster data sources that are above or to the left of the raster dataset's extent are mosaicked to the raster dataset. The block origin is the coordinate reference point that is used to number the blocks (also called tiles) in the raster blocks table. Unlike the image origin, once the block origin is established it does not change. By default the block origin is set to the image origin after the first raster data source is added to the raster dataset. Alternatively the block origin can be preset at the creation of the raster dataset. (On the ArcCatalog and ArcToolbox user interfaces, the preset block origin is referred to as the Pyramid reference point.) A mosaic operation the moves the raster dataset's image origin up or to the left triggers a pyramid rebuild if the new image origin is also above or to the left or the block origin. Presetting the block origin to a point that is known to be above and to the left of the ultimate image orgin of the raster dataset avoids the expensive pyramid rebuild.The scenario that occurred in this incident triggered a pyramid rebuild when it should not have. The logic error that needs to be repaired is caused when all of the following events are true.1. The extent of the raster dataset does not change as a result of the mosaic operatioin.2. The block origin was not preset (i.e the pyramid reference point was not set).3. The extent of the mosaicked raster data source is completely above and to the left of the block origin.The only possible work around to avoiding the pyramid rebuild for this incident is to move the block origin to the image origin. Unfortunately that can only be accomplished by copying the raster dataset or by reloading the raster dataset with the pyramid origin set to the ulimate image origin or to a coordinate above and to the left of the image origin.