I just made an unexpected discovery that fixed my problem. I don't understand WHY it fixed things or what it really means though. I tried playing with all the available settings and found that going to the "preferences->Conversion->PDF Input" tab and adjusting the "Line Un-Wrapping Factor" to be .25 instead of 0 would totally resolve my problem. I did not find much information on this setting and don't really understand what it affects.
If anyone has some info about that setting I would appreciate it. I am wondering if it is PDF specific or display device specific. I don't know if I will have to adjust it for various PDF's or if it is a "find the setting that works for you then forget it" kind of deal.
If I don't have to adjust it all the time then this will bump Calibre right up to
"ultimate conversion tool" status and make things significantly easier on me.