rendering latex code inside #+BEGIN_LaTeX ... #+END_LaTeX in org-mode 8.3.1

Question

C-u C-u C-c C-x C-l or (org-toggle-prefix-fragment) with the double prefix argument used to toggle the display of LaTeX fragments across the whole buffer whether they were inside of #+BEGIN_LaTeX blocks or not. Now that behavior seems to have changed, as only LaTeX snippets outside of blocks are rendered. This isn't that big of a deal since export works as expected. However, I did like the old behavior. Is there a variable I need to set to restore the previous behavior? Alternatively, I'd like to typeset the equation and then have it generate an image file which gets saved to the buffer and inserted inline in the same way as the babel source blocks allow. Is that possible?

Below I give an example of how it works now:

Answer 1

Now that behavior seems to have changed, as only LaTeX snippets outside of blocks are rendered.

Depends where the active point is. Here's the excerpt from the documentation for org-toggle-latex-fragment:

If the cursor is on a LaTeX fragment, create the image and overlay it over the source code, if there is none. Remove it otherwise. If there is no fragment at point, display all fragments in the current section.

With prefix ARG, preview or clear image for all fragments in the current subtree or in the whole buffer when used before the first headline. With a double prefix ARG C-u C-u preview or clear images for all fragments in the buffer.

I'd like to typeset the equation and then have it generate an image file which gets saved to the buffer and inserted inline in the same way as the babel source blocks allow. Is that possible?

Yes, just enclose them org-babel blocks like so:

#+name: hello-world
#+BEGIN_SRC latex :exports results :file test.png
\LaTeX
#+END_SRC

The second example in the LaTeX Source Code Blocks in Org Mode documentation shows how to embed latex generated graphics as png file in an org file.