Ok – I couldn’t work out the problem as such, but I ended up using a child theme, and changing the default thumbnail size to be 400px wide using these instructions :
http://presscustomizr.com/snippet/changing-default-image-sizes-customizr
Then regenerating thumbnails.
I still think it’s an oversight that the theme automatically displays images at bigger than 100%, but this worked for me.
You can see what i’m talking about on the website now:
http://www.duncancarter.co.uk
The thumbnail for my post is all blurry – even though I’ve uploaded originally at over 1000px wide, then tried 270px wide and allsorts in between but it just always scales the image then zooms in to make it blurry… so weird!