up-scaling images, why?

Hello.
Thanks for the great theme, started using Pinboard from Esplanade after taking your advice and love it.

Two problems:
I don’t want a wide sidebar. I do not have the option to shorten the width (like esplanade). If I run pages at 4 columns it makes the side bar the shortest width.

Though this magnifies another problem.

Any full post (set as summary) Expands my image size to take up the full width of the columns, making them distorted.. and even if I did resize them to match the up-scale, they are just way to big.

Can I make them display at the resolution I set them at without this up-scaling?

http://www.hikersguide.com.au/

If you click on photography, you can see this 310×360 image scaled up to 786×913.. :/