My Ruger 77 .25-06 does the same thing with it's "pet load"...
100gr Barnes flatbase-X, it'll drop 5-shot groups into 1.25-1.5" all day @ 200yds but the best I've ever done @ 75yds (the farthest butt I've got at my short-range back at the farm) is 1.5".
I've been toying around with the new 100gr TSX boattail in the same rifle (since the original flatbase X is no longer made in that size/weight) and this bullet will group much better at 75yds (1.75" so far) but at 200yds the groups stretch out to 3.0-3.5". This is what I'd expect a load to do...but I know the rifle should be able to do better.
It might be as Gary suggests in that the bullet is still "settling" into it's trajectory. would be interesting to hear more on that subject.
Might also want to play with your bullet seating length too...seating farther from or closer to the lands can definitely change how a bullet groups at one range. Might affect how it groups at various ranges too.
I'd be curious myself, but I won't complain too loud about that .7 MOA at 200yds either. That'll make for a good hunting load in my book!