There is more to this than just nuking a few files in addonpackages. I got the first, broken, version of lady D, and deleting and downloading the latest hasn't helped. I've just tried a completely fresh install of VaM together with a new windows user to remove all caching issues, it's still like she's scaled twice and her head is being crushed by the ceiling.
Are you sure you're building with v6 of the morph? If I ensure I only have the latest morph then I get a double-scaled mess, if I switch to v3 morph she's the right size. v3 only changes her body shape, not her size. v6 changes both shape and size, which then combines with the scale of 1.520, hits the ceiling and then gets crushed.
After my clean install test I went back to having both and messed with the morph and scale sliders. I can get something sensible by using v3 instead of v6 and leaving the scale at 1.520
This is v3 with a scale of 1.520
This is v6 with a scale of 1.520
v6 with a scale of 1.0
If I mess about with v6 and scaling while freezing/unfreezing physics I can get her to stand straight at 1.0 scaling, she's hovering several feet off the floor and gets crushed as soon as physics is unfrozen, but hey, thought it was worth mentioning in case it gives some clues. It looks like her hand and feet line up when she is moved down again so that might be a lot closer to what you're seeing/aiming for. Hmm, is her initial right hand position supposed to be on her own hip, or ready to touch the players shoulder?
Either way if I switch to v3 morph the scene seems to come to life
Thanks so much for making this, sorry if the above is a bit dry, I got stuck into debugging mode to try and work out what was going on!