It's been a long day sorry, so many people asking various things
No comments about colours (No worries)
Your Current Header Logo >
http://www.keepsakes4kids.com/store/skin1/images/custom/logov1.jpg
Your header width you have set as Height 76, but your logo height is 150. You need to make sure header height is at least the same as your logo height..
Also your > #header .line1 .logo a img (That's holding your image is set at 76px (When your image is height 150....
In short it is scaling your image not to it's proper height because you have set height in the above to 76px..
The header is complex, in that there are quite a few css controlling various things on the header, in that you alter one, you have to alter another to control and compensate the edits you do..