Hi Alice,
I really don't think the problem is using LC Designer 8. We have several forms that were developed in LC Designer 8 (with FormCalc and Javascript), that still function in Acrobat/Reader 9.3.1.
There are two potential issues. The first is the most likely.
In the new installation of Reader 9.3.1, JavaScript is turned off. See this blog and sample: http://blogs.adobe.com/livecycle/2009/02/adobe_reader_disabled_javascri.html
If you send the sample to the agency, a warning will appear if they open it and Javascript is turned off. When they turn javascript back on in the preferences, then your form should work again.
The second issue can be a little more trouble. Adobe have introduced a new Javascript Blacklist Framework in Acrobat/Reader 9.3.1, which can disable FormCalc and JavaScript if it contravenes the framework. See these links:
http://kb2.adobe.com/cps/504/cpsid_50431.html
Managing JavaScript Execution in the Acrobat Family of Products
As I say, unless your FormCalc is trying to access external resources, I suspect that Javascript is turned off in Reader. I don't think you have to upgrade Acrobat/LC Designer.
Hope that helps,
Niall