I just happened to find this little workaround half an hour ago! Select both paragraphs on either side of the space you want to remove. In Word 2010, go to the Home tab. In the Paragraph box, click on the little box with the arrow in the right-hand bottom corner. In the tab "Indents and Spacing" go down to Spacing. Click the Up & Down arrows till the Word Auto appears. I chose "Double spacing" at "2"; not sure what you need. Then click OK and the space goes away! I did it on the whole doc and it was flawless.
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