Hi Mark:

It's doable, presuming your copy of Word is functioning
correctly.  It's much simpler to do with the built-in
Heading styles than new ones, though.

I suggest trying it with Heading styles first, in a fresh
document, and then once that's working, try with new
styles in a different document.

These instructions are a combination of Shauna Kelly's
advice, Dave Rado's advice, and my own experience.
* * *
1.  Do the preliminaries
2.  Attach the scheme to Heading 1 by modifying Heading 1

* * *
In more detail:
There are two preliminaries:
1.1  Go Format / Bullets and Numbering / Outline Numbering
and just click on each thumbnail and click Reset for each
in succession.  If the Reset is grayed out, that's okay --
it's already reset.  I personally prefer to do this in a
completely different document, to drive home the point
that you're just Resetting your computer's thumbnails.

When all are done, close out of that area.  You will
eventually use the bottom, 2nd from left thumbnail. It is
already set up with:  the number formats; restarting each
level; Heading styles linked to outline levels.  It's a
breeze.

Preliminary 1.2:  Modify your Heading styles (at least 5
or so, possibly all 9) to have the font and line spacing
attributes you want.  Personally, I prefer to have each
Heading style based on Normal.  I find it simplest this
way (there are different opinions on this).

* * *
Now to load the scheme:
Put cursor in a Heading 1 paragraph.
Format / Style / Modify
Format / Numbering / choose that outline numbered
thumbnail / Customize

You are now at the famous "Big Board".  Click "More" if
you see it, to fully expand the screen.
Successively click on the level numbers in upper-left, and
for each level, set your Indents for the style in the
lower part of the screen.

When done with your levels:  OK  OK  Close (there may be
one more OK in there).
Now you're all set, except you may have the
infamous "Jason tab" problem.  If any level has an
undesired tab set, modify it out of that level.  Here you
needn't "go through level 1" -- just modify whichever
style is affected.

But for future modifications to the numbering or left
indents of any level, you go via modifying Heading 1 and
make your adjustments on the Big Board.

* * *
Now:  with newly created styles:  some key things:  
A.  Each number in "Number format" (on the Big Board,
officially called "Customize outline numbered list") must
be gray shaded.

B.  For each level, the 1's from previous levels, and the
1,2,3... for THIS level, must be entered in a precise
order for it to work -- and you can't tell by looking in
Number format what order they were entered.

You just have to carefully do them:  from left to right,
level 1, type period, level 2, type period, this level
(for the full level 3 number, for instance).

C.  Low on the Big Board, you must have "Link level to
style:" set correctly for each level.  Ie, if your styles
are "Outline_Num1" "Outline_Num2" etc.:  For Level 1
numbering, this slot must be set to read Outline_Num1

For Level 2 numbering (chosen in upper-left of the board),
the slot in the bottom must read Outline_Num2    etc.

I think it's a good idea to have a full set of 9 styles,
and link up all 9 of them.