brightness contrast preview does not match final result

Hello, I have a b/w image scanned into pdf format which resulted in some undesirable shadowing. In photoshop I saved the file as a tiff (w/default settings), changed it from bitmap to grayscale (w/default settings), cut the image off the background layer and pasted it to a new layer, and then did an Image/Adjustments/50%Brightness/50%Contrast with the Preview button selected. The preview looks beautiful, with shadowing greatly reduced, but when I click OK the image shadowing reverts to the original as if the adjustment was never made. What am I missing?
Thanks, Michael

Adobe Photoshop Version: 8.0 (8.0x118)
Operating System: Windows XP
Version: 5.1 Service Pack 2