Hmm, very odd indeed. The only thing I can think of is that maybe your using real world co-ordinates. The process I described above works perfectly at terragens zero point, effectively the north pole. If your trying to model something anywhere away from the zero point you will run into increasing difficulties the further away you get. Try moving your terrain so that your point of interest is at the north pole. Then follow the steps above, ortho cam etc and it should work just fine. Otherwise I cant see any reason why the terrain should re-size its self/
cheers
Richard
ps: I know it would be nice to have say, London, in its correct geographic position but you will run into multiple problems by doing so. By moving the entire GeoTiff (of say the Thames estuary) to the North Pole you will avoid population problems, surfacing mismatches, and get propper input/output of your camera data. The client will never know the city is in entirely the wrong place!