Hello.
I am a DW user and although their automated proposal algorithms need improvement (and that may be an understatement),I have never seen anything like this before. Stretched shapes- check. Too small or too big teeth- check. But never this weird "melted" look. Make sure the anatomy library is ok. You can install DWOS on a second computer legally, so if you have that, try to import the order there and see what it proposes. May be a scanning issue. Make sure all die scans are correct. I once overlooked an inverted (inside out) die scan and got nothing but trouble. Also sometimes the margin line can cause problems. Try checking it in CAD. The "exploded" view of the die has to look believable. Once part of it is missing or it has a twisted shape, something got wrong in the scan analysis process. This usually results in the overlay imploding into the die. Run the auto margin detection routine again and it should fix itself. Could you post pictures of the dies?