Image Disappearing With "In Line With Text" Option

Hello -

Here's my problem. Whenever I insert a graphic into Word (via copy/paste, or the insert graphic button), about 95% of the image is hidden behind the text above when the "In Line With Text" option is selected for Text Wrapping.

When I change the text wrapping to any other option (e.g., square, tight, top/bottom), it reappears.

I desperately need help with getting these images into "In Line With Text."

Whenever I create a new document, the images and "In Line With Text" works fine. So it probably has something to do with the document.

Here's a link from my DropBox to two files:
(1) Sample screenshots
http://dl.dropbox.com/u/2625864/Foru...geProblem.docx

(2) The actual document
http://dl.dropbox.com/u/2625864/Foru...reenshots.docx

PLEASE HELP!!! Thanks in advance.