This is the difference between "defining" the projection or "projecting" the data to another coordinate system.
First, when you defined this data as GCS_WGS84, are you absolutely sure that is indeed the correct definition for this data. Post the data extents from the layer properties page here. Do those numbers look like decimal degrees?
ie are they fairly small? If they are large ie >+thousands, then the original data is not in degrees.
Once you have established what the original reference system is, then you can take the next step and project it to a reference system appropriate for your analysis.