Photoshop CS5 - why does dragging cropped paper to layout causes it to expand to fill entire layout?

I'm hoping someone can help me out. 
I create a 12in x 12in layout for a scrappage to work on.
I open up a pattern paper and crop it to 9in x 9 in.
MOVE the cropped paper to my layout.
The cropped paper expands to fill my 12x12 in layout.  It doesn't move over as a 9x9 in crop.  This has worked just fine the last few months, but got messed up yesterday after working on some tutorial.
I must have changed some setting, but have no idea what setting it was.  (maybe some 'expand' feature, but I can't figure it out).
Any help would be greatly appreciated - thank you.

Yes, that option is already checked in my Preferences.
If it helps any, my little tutorial I did yesterday, involved doing an Active selection on a rectangle shape, and doing a 'contract' on it.
'With the selection still active ("marching ants"), go to Select > Modify > Contract.'
I don't know if this has anything to do with my problem I'm seeing now, but everything else on the tutorial was not new stuff to me.  Only this was, so my suspician is here.  But then again, I'm not selecting anything just to place a cropped paper on my layout.
Also, I was playing around with trying to move a pattern paper to my layout this morning, and I tried crops of 8x8 in thru 11x11 inches, and after I moved it over, it filled up my 12x12 layout.  However, when I cropped my paper to 7inx7in and moved it to my layout, I finally saw a slight crop.  About 0.1 x 01. inch showed to be cropped; but definately not 5 x 5 in crop.  It's like it's expaning my paper by a certain amount.

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