Word 2003 mail merge won't retain data source

I just installed an application of mine in my 44th office and have run into a
new problem when doing mail merge with Word. I have set up the document,
located the data source, tested it (successfully) and saved the document.
When I close out of the document, the next time I open it it will tell me
that it can't locate the data source. My only option is to Remove All Merge
information and then go locate the data source *again*. No matter how many
times I locate the data source it will not retain that info when I close the
document.

Here's where it gets real interesting though. The source document and data
source both reside on a local XP server. The client workstation is running
Word 2003 as part of Office 2003 Small Business Edition. However, they have
another workstation on the network that is running Office 2002. If I go to
that workstation and open the exact same document from the server, it does
NOT go through the process of telling me it can't find the data source. It
acts just like it should and automatically opens the data source that we
previously pointed to. If I go back to the machine running 2003 SBE it does
not recognize the data source.

I have this application running in something like 40 offices and probably
150 workstations and this is the first tiime I've encountered this problem.
I found another forum entry that talked about starting Word in safe mode by
using the CTRL key when you start it. Tried that and it didn't help. Oh, I
also installed the Office SP3 on this machine and that didn't help. I would
be EXTREMELY grateful if anyone can shed some light on this.