I don't believe his is a matter of X or Y up.
It's a total failure to import. I think it's a mismatch of Verts between the main obj file and the AO obj file.
That's an easy mistake to make for newer users of S3D.
You can set Blender to Import with the Y axis as up to avoid that standing on tail thing you know.
Do I need to get my box of crayons out and draw a picture?
