had the same problem
i think its in the settings / catalog page
at the bottom for the image sizes is has a "hard crop" tick box
I think this means it chops off the edges and doesnt show the full image
I ended up resizing my images after unticking the hard crop , then uploading them again but with images the same size as it says in the settings :)
although saying that .... my thumbnails and product page images arent the correct size ... but worth a try .... hope that helps