Problems with the lattice tool with quasi-radial cell propagation

Using Creo 8.0.8.0 lattice tool I have problems with generating lattices. I am replacing a volume with lattice and works well when I have "standard setting". Starting volume:

Problems start with Quasi-radial cell propagation. Only one layer of lattice is generated in the volume.

I tried to play with the Build direction and coordinate systems for the lattice definition (including first cell position), but nothing helps. Looks like the position of the original cell is not controllable with radial cell propagation. Did anyone experienced similar problems? also no labels for Lattice or AM tools