I think I'm missing some pieces to the puzzle here. Can you post a butil -stat of the file you are working on? Open a command prompt and enter butil -stat <filename> where <filename> is the directory and file name you are editing (Ex: butil -stat c:\Directory\Filename.mkd).
What is the data type of the field you are trying to extend? Following your steps I created a table with an Identity field (ID) and three string fields (Name (20), Address (50), Phone (10)). I added data to the table then edited the Name field in the PCC increasing it to 40. Looking at the table in DDF Builder I see it's been edited appropriately.
Also, if there is a Btrieve application that accesses the file, remember the application will have to be updated to accept the new field length.