I am having a bit of trouble following you, and besides from the bug I mentioned in my previous post there seems to be nothing wrong with your sky1.mdl for this example. Except that its mesh is open, but that is not important now.

I think the easiest fix for you is to make it very big and far away so it doesn't cover anything else.

Or if you want to use the model as a sky sphere, than model a hollow sphere and let it move every frame with your camera xyz.