This page about ob-lilypond has an example of PDF output of this org file. The PDF looks great--small sheet music snippets under explanatory text. The whole thing fits on 2 pages. However, when I grab this org file and C-c C-e l o on my own system, the output PDF is 15 pages. Each paragraph of text and each small musical illustration are on their own page, over many inches of whitespace.
I don't know if this is significant, but I'll mention too that my system asks for a y/n input from me regarding the export of each individual block of Lilypond code during export.
The org-exporter had some complaints:
Overfull \vbox (75.24173pt too high) has occurred while \output is active
[2 <./ionian-eps-converted-to.pdf>]
<dorian-eps-converted-to.pdf, id=29, 541.02126pt x 814.04124pt>
<use dorian-eps-converted-to.pdf> [3]
Overfull \vbox (36.67224pt too high) has occurred while \output is active
[4 <./dorian-eps-converted-to.pdf>]
And I wonder if this has something to do with Lilypond being determined to print its version number at the bottom of each block?
And here's the beginning of the exporter's TeX file:
\documentclass[11pt]{article}
\usepackage[utf8]{inputenc}
\usepackage[T1]{fontenc}
\usepackage{fixltx2e}
\usepackage{graphicx}
\usepackage{grffile}
\usepackage{longtable}
\usepackage{wrapfig}
\usepackage{rotating}
\usepackage[normalem]{ulem}
\usepackage{amsmath}
\usepackage{textcomp}
\usepackage{amssymb}
\usepackage{capt-of}
\usepackage{hyperref}
\usepackage[cm]{fullpage}
\author{Steven Arntson}
\date{}
\title{Modes in the Key of C}
\hypersetup{
pdfauthor={Steven Arntson},
pdftitle={Modes in the Key of C},
pdfkeywords={},
pdfsubject={},
pdfcreator={Emacs 24.5.1 (Org mode 8.3.1)},
pdflang={English}}
\begin{document}
\maketitle
\section*{Ionian Mode}
\label{sec:orgheadline1}
Lorem ipsum dolor sit amet, consectetur adipiscing elit...
\linebreak
\includegraphics[width=.9\linewidth]{ionian.eps}
\section*{Dorian Mode}
\label{sec:orgheadline2}
Lorem ipsum dolor sit amet, consectetur adipiscing elit ...
\linebreak
What might cause this?

\begin{document}and at least one bit of text which generates extra space.\header {tagline = ""}at the top of each Lilypond SRC block. Thank you very much for working through this with me. If you wish to post an answer, I'll accept it.