Blurry/Pixelated Featured Images

The problem: My blog featured images are blurry/pixelated.

What I have tried so far:
– I have my media size options setup correctly.
– I have regenerated thumbnails
– I have tried reuploading the photo
– The photos I upload are high quality / large format
– I have disabled plugins

In the code, it looks like its taking a 200×200 image and stretching it to the featured image size. My thumbnails were set to 150×150 but the code below still read 200×200. I changed the thumbnail size to 200×200, regenerated and nothing changes.

<img width="200" height="200" src="http://calisfinestclothing.com/wp-content/uploads/2014/01/Screen-Shot-2014-01-29-at-12.58.43-PM-200x200.png" class="attachment-post-thumbnail wp-post-image" alt="Skate">

Link to site: http://calisfinestclothing.com/blog/

Any help is greatly appreciated. Im struggling with this.

-Chris