||Which tools have you tried using?
ArcGIS with the ArcInfo license can create native DGN (V8) and DWG (R14, R2000, R2004/5) files. With modelbuilder you can add projection tools to automate both projection and translation.
The "To CAD" toolset has four tools used to define the translation to native CAD format.
You can learn about them in the "An overview of the To CAD toolset" topic in the online help:
There are also some ESRI Technical Support articles that explain workflows that translate data into native CAD format.
"HowTo: Create CAD Files from ArcGIS 9.x Feature Classes with the ArcInfo EXPORT TO CAD Tool"
"HowTo: Control Exported CAD Properties Using a Lookup Table"
An hour of your time watching the FREE ESRI Virtual Campus technical seminar "Geoprocessing CAD Data with ArcGIS" may prove very useful. You can get a high level overview of the different techniques available for bidirectional GIS/CAD translation as well as sources of more detailed information and tools.
Overview: The ArcGIS 9 geoprocessing framework contains tools that provide sophisticated and powerful control over GIS and CAD data interoperability. These tools range from the simple ability to select CAD features by attribute and convert them to a new GIS feature class to highly complex geoprocessing models that automate a variety of CAD/GIS translation operations. This seminar will present various methods for converting CAD data into GIS data, as well as options for converting GIS data into CAD formats. Additional discussion will briefly address issues relating to CAD annotation, georeferencing, and transformation, as well as the management of attributes and table schemata.
Details at: http://campus.esri.com/acb2000/showdetl.cfm?DID=6&Product_ID=832
ESRI Technical Marketing.