Attaching envelopes in a Mailmerge doc

I have a very interesting problem from a user:

(This is part of an ongoing effort to migrate from Word
Perfect to Word.)

I have converted a data source file to Word-compatible
format. This file is linked to a document, and field tags
have been inserted into the document, and all is well.

Now the user wishes SOME of the fields to print on
envelopes (300+ records in the data source). So
she "attached" an envelope via the toolbar, and added
field tags from the data source onto that section. (Letter
is 2 pages, 1st pg on letterhead, 2nd on plain, and
envelopes in a separate tray.)

Well, the envelope prints fine, but the letter itself is
now in a tiny font, and looks like it's trying to be "fit"
onto an envelope-sized page (even though the source tray
is filled with letter-size paper). The "page layout"
dialog shows that all is well, with appropriate page sizes
and margins for each section.

To be honest, I'm stumped. Any ideas out there...?

Thanks in advance!