Hi @jeanne_c:
Your TOC shows two levels but your bookmarks don't match, and you are listing four paragraph styles in Style Settings.
In Layout > Table of Contents, click the More Options button to display all of the TOC controls. Then map each style listed under Include Paragraph Styles to the appropriate level.
The paragraphs styles collecting the top level heads 1., 2., 3. and 4. should be level 1, and the paragraph styles collecting the subheads 1.1., 1.2, 1.3, 3.1, 3.2, 3.3 and 3.4 etc should be level 2. This won't change the TOC, but it will update the bookmarks.
~Barb
