FYI: Just learned what was going on with the freakin' suctacular new Blogger layout.
It seems the DEFAULT Blogger setup is "HTML" -- if you look in the upper-left corner of the Post screen you have HTML and "Compose" as options.
If you select Compose, it has a more normal sized screen, and whatever you type will have normal spacing, too.
Who is designing this new shit, Google? Have they ever USED a blog before?
Anyway, at least we won't have to post giant blocks of text anymore LOL.