There is a new bug introduced in 3ds Max 2013 Product Update 3 that affects displacements in Wall Worm. As the displacements use the DirectX_Shader so that you can paint the alpha blend of blend materials... this mainly affects displacements.
I have found that the name of any Render Material of a DirectX_Shader will now always get renamed to the default material name of a directX render material. This is consequential because the render material is the material that gives a material it's name in the VMT exporter and the VMF exporter.
There is a thread over on the Area about this DirectX bug (http://area.autodesk.com/forum/t68938). If possible, please test this on your system if you have 3ds Max 2013 PU3. If you too have the problem, please make a comment on that thread and submit a defect report to Autodesk. You can do that by clicking Help > Report a Problem in Max. In your problem report, please explain the problem as well as link to the thread on the Area. Hopefully it will be patched in the next Max update.
In the meantime, I have built a function to rename render materials of DirectX_Shader. This temporary solution will be included in the next WW update.
I have confirmed this bug with several other people. Please do the Wall Worm nation a favor and REPORT THIS BUG! (http://usa.autodesk.com/adsk/servlet/item?id=12331406&siteID=123112&SelProduct=3dsMax).
As it turned out, this was a long-standing bug in 3ds Max. I only noticed it after some major updates to the WW material export functions. I recoded WW such that it is not an issue anymore.