Forced to crop header image that is smaller than req

Hey all, newbie please be gentle 😉

I have WP installed in a VM on a Win2K3 box using XAMPP as the base.
Just trying to learn my way around and this one has me baffled.

In the twenty eleven theme I am trying to change the header image.
Text says:

You can upload a custom header image to be shown at the top of your site instead of the default one. On the next screen you will be able to crop the image. Images of exactly 1000 × 288 pixels will be used as-is

My image is 1000 X 255 and yet by default after upload the right side of the image is cropped out and the dancing ants cant be expanded to encompass the whole picture. I have reduced the picture multiple times to ridiculously small sizes and the same thing occurs with every image.

Tried in IE, FF and Chrome, same results.

Any clue what I am missing?