I develop a forked version of Display Widgets called Display Widgets SEO Plus at https://www.ads-software.com/plugins/display-widgets-seo-plus/ and I’m familiar with the issue.
I’ve not used the theme you use, but if I understand your setup the SEO theme I develop (Stallion Responsive) has a similar footer widget setup (4 lined up footer widget areas). I think I got the code from one of the default themes (maybe TwentyTen) and it’s designed to show the widget areas only when widgets are added to them.
So if you add widgets to area 2, 3 and 4 it looks like you’ve added widgets to 1, 2 and 3 because widget area 1 isn’t loaded.
It sounds like you’ve hidden the widgets in area 1 (via Display Widgets settings) which means area 1 doesn’t load.
Is this what you’ve done as it explains the behavior?
I see the same thing with the Stallion Responsive theme footer widget areas, the solution is always load a widget in all four widget areas. I added a custom theme feature to have Spacer Widgets, so if I were setting up widget areas that would be blank I’d add a Spacer Widget to the top of each widget area (even then you still get a blank widget area, but it hasn’t moved from 4 to 3 etc…).
In the Display Widgets SEO Plus Plugin adding an empty Text Widget to Widget Area 1 stops Widget Area 2 moving across (still a blank space though for widget area 1 rather than area 4): not tested this with the Display Widgets plugin (I assume the same result since my plugin is based on this one). You could set the empty Text Widget to have the opposite Display Widget options as the widget that’s causing the problem in area 1: when the current widget is hidden the empty Text widget shows.
Best option is design your widget areas to always load something so they look balanced otherwise you’ll have blank spaces somewhere.
David