I just installed the K&N in my Atlas, and I was shocked at what I saw on the stock filter. For some reason, in addition to the std paper filter, there was a large air-porous foam layer added on top of the paper part of the intake. I'll post the photo shortly, but it looked like batting/padding that you would find inside a couch pillow.
My friend and I had the same thought - it looked like the factory had left packing material on the filter when it was installed.