Try another font, one with scaling; this looks like the PDF isn't finding a big enough font for the cap-W and is substituting. The other option is to use a dvi-to-PDF translation.
As jetxee mentioned, it is necessary to use a scalable font in order to get exactly the right size for the initial. If you change the font from the default, this will occur without you having to do anything.
For historical reasons, the default CM fonts are loaded to "snap" to specific sizes, rather than being load-able at any scaled size. This is from the time when the original Metafont sources were used, when a different font size changed the actual shape of the glyphs (Google optical sizes for the curious).
The canonical solution to fix this problem with the CM fonts is to load the fix-cm
package. The package type1cm
is an older package that basically does the same thing.