What language do you see in Type/Character with text selected?
It said "Tamil (india)" in that pallete, I didn't realize you could set the language there. Thanks for your help! Problem 100% solved.
That is THE place you set the language, other than as part of a style definition. Many users are confused by the dictionary options in the application preferences. This does not select a default language or affect the text in any way, it's just where you get to choose which dictionary vendor will be used, when more than one is installed, to spell-check and hyphenate text to which that particular language has been assigned.
As a character-level attribute, you have the ability to assigne the correct language to every bit of text in the document, so if you are mixing in "foreign" words they will be spell-checked according to the correct dictionary.