Virtual clip woes

So i created a bunch of 5 second virtual clips from a long dv clip. I then assembled those virtual clips in succession, each one crossfading into one another. The tracks are laid out as follows: first 2 tracks are for the virtual clips. The 3rd video track is used to hold the long dv clip in which the virtual clips pull from. I then have a 4th audio track. The timeline viewer renders the video as i expect: the only video is from the virtual clips. However, the exported video shows something else. It shows the 1st track, but bypasses the 2nd track and just shows the 3rd clip instead. The crossfading still works, it's just crossfading the wrong tracks in the rendered video.

I could just razor the clips instead of creating virtual clips, but I was wondering if this is just a bug or if i'm not using virtual clips right.

Thanks