There's a service called WordService available for free from Devon Technologies.
http://www.devon-technologies.com/do....html#freeware
If you download and install it, you'll get a Reformat option in the Text portion of your Services menu, and all you have to do is select the wrapped text and invoke that service.
Another way to go about it is to paste it as RTF, then convert to plain text via Format->Make Plain Text in TextEdit. The former might be a little easier if you are pasting a number of chunks into an existing document, and the latter is probably easier if it is a one-shot deal.