Have you tried:
– deactivating all plugins (yes, all) to see if this resolves the problem. If this works, re-activate the plugins one by one until you find the problematic plugin(s). If you can’t get into your admin dashboard, try resetting the plugins folder by FTP or PhpMyAdmin. Sometimes, an apparently inactive plugin can still cause problems.
– switching to the Twenty Eleven theme to rule out any theme-specific problems.
EDIT: Yes, like kmessinger said :), I see we almost posted at the same time for the same answer.
Sounds like a javascript conflict to me. You can try to debug it by disabling all the plugins to see if the editor works. If yes, then there is a plugin having conflict with the editor.
So to find the culprit, turn the plugins one by one, while testing the editor.
Unfortunately, I’m a bit limited as to what changes I can make – it’s not actually my site. I think it must be site specific, as I don’t have any problems with my own WP blog, and changing browsers didn’t affect anything.
Oddly, as the page loads, the editor starts out the correct size, then suddenly shrinks.