fixed... sort of.
I found the problem in INCLUDE_DIR.class.email.php
$body = stripslashes(preg_replace("/(\r\n|\r)/s", "\n", trim($message)));
For reasons I still don't claim to understand, the above regular expression was taking a line like
c:\Program Files\Whatever\
and turning it into
c FilesWhatever
on all the outgoing messages. So I just removed the regex and settled for just trim-ing that line.
-jeremy