Sorry for digging up an old post, but I am having the same issue.
I will drag am MP3 into the program, go to Amazon.com or any other site and copy the cover art, and paste the image directly into the program on the cover art location. The cover art shows up but it will be distorted, basically showing the cover and then down the entire left side a small portion of the cover is repeated. It is almost like the program is trying to fill a certain pixel size, but instead of stretching the cover in both directions it only does in 1 direction and fills the remaining white space with a small sliver of the cover.
If I use the Amazon.com web source to get the cover it works great... I can post a picture of this issue if need be.