Orpheusftw: Thanks. I sorted it out by changing graphic mode from Overlay to something else, and by selecting keep aspect ratio.
Is there any specific reason why GoG would have it set to Overlay by default, and have it NOT maintain aspect ratio? Who on earth would want to play a distorted resolution? I wish I had a better idea what these modes meant.
This seems to be a mistake on GOG's part. The GOG installer deploys one of two DOSBox .conf files based on the Windows version being used; the file for Windows 8 64-bit has the correct aspect=true while the one for other versions has aspect=false.
Waltorious: As for aspect ratio, is that actually an option from GOG? It's been a while since I messed with the graphics utility, but on my computer I have the aspect ratio setting checked in my graphics card options in Windows. I'm pretty sure you need to have it set at that level for it to work.
DOSBox's aspect correction is different from the video card's GPU scaling. The DOSBox setting determines the handling of resolutions with non-square pixels (such as the 320x200 used by Anvil of Dawn and many other DOS games); these resolutions filled the whole screen on a 4:3 monitor back in the day, so enabling DOSBox's aspect correction skews the output to the intended 4:3 aspect ratio (regardless of your monitor's aspect ratio) while disabling it uses the original pixel resolution (which may result in letterboxing, depending on the fullscreen resolution DOSBox is using).
Setting the video card's GPU scaling to maintain aspect ratio ensures the most accurate result as long as DOSBox's aspect setting has also been set appropriately.