I assume the above tests were done using _color_ watermarks
I've done the same here with no problem whatsoever, using two different
jpegs - neither of which were from the Office collection. Both printings
turned out perfectly (although I am using a different printer - Epson R800 -
but that should not make a difference if the problem were with Word).
It would seem that the problem might stem from one or both of two sources:
1) The images themselves are not being effectively translated. Not all jpegs
are the same & depending on the origin some software will not handle some as
effectively as others. What you might try is going to View>Header & Footer
in the doc that has the watermark you want to use, Ctrl-Click the image &
choose Edit Picture (not that you're going to actually change it yourself).
When the Edit Picture window opens, just click the Close button, save the
file & try printing again.
If that doesn't correct the situation, go back & Ctrl-Click the watermark
again & choose Save as Picture, leave it set for PNG with whatever name you
want to use. Then reinsert the new image as a watermark (but remove the
check for 'Washout') & see how that works.
2) I noticed that you referred to Office 11.1 - you might want to update to
11.2 as there were several previous issues it resolved. If you do update,
make sure you use Disk Utility - Repair Disk Permissions immediately
afterward. In fact, it might not be a bad idea to do so anyway.
Regards |:>)