Yes, extra big images in the content block, will screw everything up.. it's kinda like trying to stuff a softball down mouse's throat.. it's almost impossible, without breaking something right lol?
Anyways... download my "fixed" files for that default theme too. This will help fix the alignment issues with the footer and stuff.
Do this in order:
1) Download: http://www.vindictivebastard.net/downloads2/default.zip
2) Unzip it of course, then in the blog's control panel, select another theme temporarily. Like the: "classic" theme.
3) Upload ONLY the PHP FILES and CSS FILE, OVER the original existing default theme files in the FTP directory for it.
4) Reselect the default theme in the control panel.
You should be all set to go then.. =) More info on it here:
It's widget friendly too, just gotta come up with "CSS Styles" for it then, hopefully soon..