If you say you are getting great results with 13x19 paper then it might be an issue with the printer driver and OS Lion. Epson has very specific instructions on updating to the Lion driver. Did you follow these?
I have seen a lot of reports of driver issues with Macs that are not happening with Windows. I don't run Macs so I can't really help here. I would contact Epson if you followed the instructions in the link above.
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