Everywhere I've just checked, people "who look like they know what they are talking about" say the lip acts as a cushion between the reed and the teeth(as I thought). If this is correct and you don't have larger than average lips, surely you are folding your lip back over your teeth?
I read this when I first picked up the horn. It played havoc with my bottom lip though. I think as I've become more accustomed to playing and my embouchure has got stronger, my lower lip has moved out and it no longer covers my bottom teeth. I get a much better tone (to my ear) that way. But go with what feels and sounds best for you.
