Word picture object scale messed up in Word document

[Pat McCarthy]

If I create (insert) a new Mocrosoft Word Picture Object
inside a Word document, then close the picture object and
return to Word, the scale of the graphics/text inside the
object is way oversize and does not fit inside the object
frame.

The same happens if I try to edit a previously good Word
Picture object - but only if I make a change inside the
picture.

In fact, if I take a perfectly good picture object in a
Word document and right click - convert to 'Picture
object' the same thing happens.

The pictures are perfectly fine when opened as picture
objects. Something has gone with the scale of the
picture object renderer in word.

I'm using Office XP pro, Windows xp pro and all service
packs. I'm not sure when it broke but it did work a few
months ago. Now another workstation is exhibiting the
same problem.

Has anyone seen/solved this.
Pat.