Additional work:

I replaced the edited Sage stylesheet with the original Sage stylesheet. No correction occurred.

Using the Sage template I remove (by changing the file name from sage to xsage) one-by-one each sage subdirectory. No positive change was found.

I changed Templates. I went from Sage to Classical Zen Cart. At first it seemed that the images were correctly placed in the narrow Classical template product listing display. But on further inspection I found that if I changed the Classical ZC stylesheet #mainWrapper width (about line 184 in the stylesheet) from 750px to 100% the same problems occurred.

I went back to the Sage Template. I changed the #mainWrapper width to 750px in the stylesheet and everything looked OK (but too narrow).

So mainWrapper width at 750px everything looks OK but at anything above 750px (I tried 850px as well as 100%) we have this problem.

Could this be a bug? Or, could this be an interaction with addon Admin Profiles (I doubt this)? I just do not think this is a bug because others would have seen this.

Oh. This work was done on my local machine using a clean install of ZC 1.3.7.1.