If I remember correctly, you would need to uncheck the
"Export File with Simplified Data Structure"
in the translator setup, but not quite sure it did work.
If you don't mind adding an extra step to the workflow, you can try the workflow I outlined some time ago:
http://archicad-talk.graphisoft.com/viewtopic.php?t=35364&postdays=0&postorder=asc&&start=11
I used to use the same workflow a long time ago, but found the autoCAD 3D export no to be so reliable when used for big projects and stopped using it when I needed material separation. So I use AutoCAD as a sort of translator between the good .3ds export and .dwg file link.
The import option in autoCAD will let you separate each layer and separate each object according to the materials it has; just make sure to use the split by material option.
I usually first "add all", then select the global settings, camera and sun and remove them. set options and let it import. then save and update link. works as nice as your workflow, but has the extra step of importing/saving in the middle before file link update. I've been using this for very large projects flawlessly.
BTW... autoCAD will seem to hang when importing very large scenes, but it takes a while to separate each object and construct the mesh per material.
Hope this helps.
Best regards.