Upload & Sell: Off
I had this same problem. I set my image width on my blog to 800px wide. What I didn't know is that the blog template actually adds another 15 or 20 or 30px to the mix. So when I resized my images to 800px, they were too big (they should have been at like 780px or something). Once I resized my blog template width to 820 or 840 or something, then uploaded my 800px images, everything went just fine.
Compression is a helluva thing, man.