Use Firefox with Firebug add-on, very helpful to find out css, classes, divs....
Your site still shows
#header .line1 {
direction:ltr;
height:140px;
position:relative;
}
#header .line1 .logo a img {
height:125px;
width:370px;
}
while your logo dims are <img height="154" width="390".......
You have to make line1 and image heights more than 154px
That's why " It's still slightly distorted and fuzzy though"
If you changethe css you may need to clear your cache to see the changes.
P.S. Correction: if your img dims are correct make
#header .line1 .logo a img {
height:154px;
width:390px;
}
to be same as your image dims
Line1 height must be more then 154px