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I had the same problem today.It turns out that ESRI sample that you used is wrong. they used for fd in arcpy.ListDatasets("*", "CAD"): but "CAD" is wrong, is not a valid feature type for this tool - remove it and the script will work, or use "*.dwg".


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The best solution that worked for me is creating CAD world file manually. It is simple, all you need is a pair of coordinates for 2 points in opposite corners. Fromx fromy tox toy, same for 2nd corner



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