This may help:
"The data is in a geographic projection. ArcScene assumes that the
data loaded has the same vertical units as the defined horizontal units.
This causes the vertical units to be stretched to a great extent.
Solution or Workaround
There are three solutions to this issue; select one of the options below:
* Project the data to a non-geographic projection.
* Adjust the Z unit conversion for the layer to a very small value.
* Adjust the vertical exaggeration of the entire scene to a very small value.
