Header image issues

Same issue as many others it seems – when I upload a header image it’s distorted and blurred, almost like it’s been zoomed in too much.

When I adjust the header height in Header Elements > General, if I put that to the maximum height (800px) I can actually see the image as I want it; it appears at the top of the blurred image, but when I change the height of the header back to say, 300px, it gets covered again by the distorted image.

This is so frustrating! Help!