I have just run into this issue myself. At first I thought it might be that LiveCycle is not yet fully compatible with Office 2010 but after doing some googling it seems there are plenty of folks out there successfully converting Word 2010 documents to PDF.
As a temporary workaround, you could try a copy of an earlier version of Word should one be available to you.
If I'm able to find a solution to the issue, I'll let you know promptly.
Josh Boyle
jboyle@cardinalsolutions.com
Cardinal Solutions Group