What is the format of your original media, fullscreen or widescreen (16X9)?
The original format is widescreen.
Try copying your 4x3 sequence into a 16x9 sequence which is using the correct preset.
You may need to tell Premiere to interpret footage as widescreen.
A good way to make sure that you have the correct sequence preset is to drag a clip onto the "Make New Item" icon at the bottom of the Project panel