Monarch will enforce a page break every 256 lines if no page break is defined for less than 256 lines. Have a look at the OPTIONS for INPUT.
If you can define a page break that will work but has less the 256 lines you might be OK.
However if you have only a REPORT header section and no repeating PAGE header I think you should define your Report Header template as an APPEND template but NOT a Page Header Template.
Unfortunately I do not have Version 4 installation available to check it.
If you set up a Page Header template the system will expect to apply that template every time a page changes accoring to the template definition, a new page identifier or the 256 line limit being reached. From your description I think that is what may be happening with your report.
If that does not help let us know what problems it leaves for you and we can think again.