There are some great posts on this forum and others about this topic. But, reading through all of them a deciphering who knew what they were talking about took me three hours.
So...to benefit others and to try to make it simple I want to post my findings.
The most frustrating thing about my lost 3 hours....the solution is so simple.
PROBLEM: If you are typing or cutting and pasting Hebrew in an older version of Word your letters get reversed.
SOLUTION: If you upgrade to Office 2011 it fixes it perfectly.
Nothing else needed to be done; no extra spaces, no font downloads, no font changes, no partitioning my drive to use Windows, no using a new word processor, etc. The problem was that older Word forced left to right and reversed the order of Hebrew words and letters. New versions of Word do not reverse the order of Hebrew words.
For the record I have a Mac and Logos 5. I had Word 2007. I now have Word 2011.
I do hope this helps someone avoid the time it took me to figure it out.