I am not seeing the behaviour you describe. Do note, though, that I had to change the link path to one applicable to my system, since LINK field paths in Word are always absolute and, as downloaded, still pointed to the address on your system.
Since I can't replicate the problem, that reinforces the possibility that you have a faulty Office installation. Another possibility is that a rogue 3rd-party adding used by your organisation is compromising the way Office is intended to work.
As for your note inserting links to Excel, the simplest way to do so is to copy the desired Excel range, then paste it into Word using Paste Special with the 'paste link' option and your preferred paste format.
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Cheers,
Paul Edstein
[Fmr MS MVP - Word]
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