Blend modes disappearing when merging/creating smart objects of multiple layers.

Hey there,

I am trying to combine multiple layers with some on 'multiply' and the rest on normal.

When I merge the layers together or convert the group to a smart object, the multiple effect works on overlapping layers, but I lose the effect of the multiply from the seperate background file. I need to background to remain seperate from the layers I am trying to merge. See photos.

I have tried from other forum suggestions

- changing from 8but to 16bit.

- Zooming to 100% before flattening/merging

- Merging layer by layer from bottom up/merging different groups of layers together etc.

- Playing with the blending options of the group and the individual layers that are on multiple

- command + shift + option + E doesnt work

Thanks heaps in advanced.