Some additional info:

I am using Excel 2007.
I tried running in 'safe' mode. Same results, so it's not a macro (right?).
Paste Special only gives me the option to paste as Unicode Text or Text. It's as if the formula was not copied... only the value got copied. So the problem is in the Copy operation (not the Paste operation).
I get the same results using Cntrl+C, right-click the cell - Copy, or the Copy/Paste buttons on the Home tab.

???