In side-chain liquid crystalline diblock copolymers, driving forces for ordering of the material may be provided by the chemical incompatibility between the blocks and by the liquid crystalline nature of one of the blocks. We study the microstructure and its development from initially isotropic solutions in side-group liquid crystalline copolymers based cn styrene-isoprene diblocks. Hierarchical structure from the 5 Angstrom to the 500 Angstrom length scale is observed, the product of coherent block copolymer microphase separation and liquid crystalline mesophase formation. The presence of cylindrical microdomains of either the poly(isoprene-LC) or poly(styrene) block markedly increased the thermal stability of the LC. Confinement of the LC to cylindrical microdomains strongly inhibited defect formation within the mesophase after suitable orientation and thermal treatment, readily manifested by the significantly improved optical clarity of these samples versus LC matrix or LC lamellar samples. We consider the relative stabilities of parallel-transverse, perpendicular-parallel, parallel-parallel and transverse-perpendicular arrangements of the microdomain and mesophase structures in interpreting the development of structure in these materials under oscillatory shear.