Well, I'm not the guy that runs offset equipment, so my help ends here. Maybe just run it very slow and hopefully see where it is catching? Seems like it would be before the rollers if it is catching and then getting compressed?
Chances are the envelope is hitting something either on the feed table or the gripper bar. As a test, you could shift the envelope in the feed table to the left or right and see if the problem goes away.
You should also be able to stop the press with envelopes still in the press to see where the corner is folded and work back to the feeder from there.
I'll bet there's a feed roller that's either too close to the edge of the envelope or barely on the envelope. Pretty much exactly what pcmodem has said.
If you can't take pressure off the rollers, move the feed pile. You may have to make a new plate to position the image again.
Right now since I have a bar code on the top, the pile is toward operator side. I Even tried to move to gear side. still folding, now its jaming after 2-3 run though. switched to 10's ran perfect.
Just a quick update, I couldnt get it to stop folding corners, so the 30k envelopes went over to our digital printer, the guy running those was not a happy camper. lol