I think that if you use smoothing within the Editable Poly modifier, you can choose which edges you wish to smooth, whereas the Smooth modifier smooths everything.
Convert your model to an editable polygon (if it's not already), or apply the Edit Poly modifier, then go in and you'll see Mesh Smooth, or something similar to it (I don't have Max open right now), and you can choose the edges you wish to smooth. This should give you more control over the smoothing process.
Re: edge loops smoothing by Ryan John on May 23, 2011 at 3:06:46 pm
Select the edge/loop below the one you have highlighted and remove it that is the one causing you a problem and is not essential for the model, it should not effect your (wanted) hard edge as you already have a chamfered edge on your extrude.