The new avatar size is 150 pixels x 150 pixels, while the old one was 150 pixels wide and whatever you had tall. Now it makes everything 150 x 150, distorting your avatar image.
You can resize you avatar on your own, fitting it into a 150 x 150 size. For mine, I resized the canvas to 150 x 150 and added a grey border to the top and bottom. Solved the problem for me.
That explains the distortion; now I see that my problem is that the web page isn't designed for 17" monitors at 800x600 pixel resolution--the avatars all have scroll bars. They don't disappear until I change the setting to 1152x864, which is too small for anyone's eyeballs.