I have a problem with inserting a picture next to a line of text with a drop cap. Can I have them be side by side without the Drop Cap falling on the wrong side of the picture?

If you insert the picture, give it 'square' wrapping and lock its anchor to the paragraph, you should be able to tell Word to align it with the left margin. Although that will still leave the dropped cap to the left of the image, you can then drag the dropped-cap to the right to make space for the image.

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Cheers,
Paul Edstein
[Fmr MS MVP - Word]