I was able to reproduce the issue.
Looks like it's caused by overriding the resolution in the cpl.
You are right... setting the resolution to "Unforced" solved the issue. Thank you! I forced the resolution because that allowed me to have a large enough HUD while still playing in my desktop resolution (1080p). Setting the resolution to 1080p directly in the game results in a really tiny HUD, but with the resolution forced through dgvoodoo2 I could change the resolution in the game to something much smaller to get the larger HUD, while keeping the high resolution in the game itself.
Anyway, I guess I'll be playing in 640x480 now, unless you know of a way to increase the HUD size. It's more authentic like this, anyway. ;) In high resolutions, the textures and models may actually look worse.
Edit: Looks like JkGfxMod has HUD scaling. I'm going to try that!