So, leet:
First off, undiscovered ores do not exist, until you discover them. That's simply how the game works, it's intentional. If you don't like it, go ahead and try to find Red_Guy (Which I seriously doubt you can do)
Second, I'm 100% certain that lotto blocks gave you bigger buffs the further down you went. Them not giving buffs above 2 seems perfectly normal for around ground level. There are even "Ruins" that you can go to with lotto blocks that have the potential to double the current buff every time.