Setting a control to visible prevents it from rendering. See MSDN: http://msdn.microsoft.com/en-US/library/system.web.ui.control.visible.aspx
What you can try is putting a div (runat server) or asp.net panel in the 2nd update panel and then when you need to hide it, try adding a style or css class to that div or panel which sets the style property of display to "none" like this:
.hiddenPanel{ display:none;}
The above code block is an example of a css class that you might define and which you would add to the div as a class reference such as class="hiddenPanel".