Dragged objects to scene start with ZERO height [SOLVED]

(I had already created a post but it seems the post got lost?!
anyway...)

I drag an existing object from the Create menu and when dropped onto the scene it appears with zero height, I have to manually pull the middle "blue bubble" to create its height.
(this happens in everything: already existing scenes, new projects, TGB tutorials)

I updated my avatar to show how they look when dropped on any scene.

EDIT: Solved, I had my resolution settings messed up.

TGB2D
OSX 10.6.7
2GB RAM