It's been a while since I needed to use Prep or do any file adjustement pre-processing but whilst I can recall using the LONG parameter with variable lengths specified I don't recall ever using NR in that way.
That said I think I have probably only had to use NR once or twice to set only a single break point for the records.
Assuming you have a lot of records which appear as a single line with no break points defined, could you use NR in the first instance with a single parameter to split the records into their required lengths and then, assuming tghey are still too long for Monarch to deal with like that, split them again using LONG?
Based on what you mention about the split points V7 should be able to deal with the records as a single long line (providing that carriage returns are made available to it) I would have thought but I may have missed something and so lack a complete understanding of your problem.
I had tried "cutting up" the file in some different ways in Monarch Prep as you suggested, but every time, the output that I ended up with and then imported into Monarch was different and unusable from what we had been doing as I described in my first posting.
I ended up writing some VB 6.0 code that used VBSendKeys to send to Monarch Prep keystrokes and basically automated the Prep processing that way.