I figured it out for my configuration. This is not an issue with Contact Form 7 but is most likely an issue with your theme or a plug-in. You just need to find out which of those is causing the problem and correct it.
If you're interested here is the process.
- Switch to a default theme like "Twenty Eleven"
- Disable all of your plug-ins except for "Contact Form 7"
- View your form page to verify that formatting is now working properly
- reactivate your theme
- View your form page to determine if CF7 is still formatting properly
- If not, the issue is with a formatting script in your theme, if it is formatting correctly go to the next step
- Reactivate plug-ins one at a time, checking formatting after each activation until you find the plug-in causing issues
For me it was a plug-in called Lizatom Shortcodes, which is a plug-in that offers more shortcodes and formatting options. Fortunately this plug-in has an option to disable custom formatting and as soon as I clicked that option CF7 formatting worked correctly again.
I hope this helps you. I've been banging my head on my desk for 10 hours now trying to figure this out.
Good luck!
Mike