THe zebra must be set up with the correct label size and teh software that creates the lable must contain the formatting information. The Zebra website contains both the user and programming manuals that completely describe this process. At this stage, the user manual will be the most helpful so you can verify the printer settings. From your description, I would suspect that the label size the printer is expecting is different than the actual label.

Hope this helps,
Dan

Try to reset the default values, to do this enter the menu. Exit the menu and when it say's Permanent, use the arrow keys to cycle around until it says load defaults and accept that. It will load the defaults and fix the problems you have