Well, folks, a bit more troubleshooting revealed both the cause of the problem and a workaround.
If you have a multiline field on a form, select it and go to the Object Palette, then click the Value tab. Then, click inside the Default field and you'll discover LCD has put an extra space there. Trouble is, if you delete it, LCD puts it right back in! I tried multiple times with more than one field. So this is the source of the extra space.
I thought the script fix would be pretty simple: in the Enter event of each multiline field, I just put the following:
if ($ == " ") then
$ = ""
endif
But the script didn't recognize the space put in the field by LCD. However, by using the encode function in FormCalc, I was able to convert the space to its URL encoded value. So this is the FormCalc function that ended up working:
var extraspace = $.rawValue
extraspace = encode(extraspace, "url")
if (extraspace == "%a0") then
$ = ""
endif
Hope this helps someone!
Kathryn