That blue box looks fine to me. If it gets any larger than it should, though, it means you've drawn something really small and out of sight on the same layer and it's getting converted along with the wall. Try just selecting that line before converting, and not the whole layer.
I assume you're using a basic hit test and are therefor are checking against the bounding boxes. What you need to do is use a point hitest with shapeflagging and test the xy coords with the wall.
Otherwise you could try creating several "segments" of wall, instead of one big curvy line. That way it will run faster by using bounding box hit testing.
Never mind everybody, I got it working, I just didn't have the right instance name on my wall, i can't believe I've wasted so much time because of that, anyway thank you all again for your help.
Glad you got it working. I've had that same error quite a few times, where you waste many hours trying to fix a bug, while the error is somewhere else... mindbreaking O_o