The streched image portion should be fixed in beta2 if the graemlin is added again.
Standard behaviour for graemlins to require the image to be uploaded as it's fairly different than all of the other image types in that it needs to have some information stored in the database about the image.
Should be in b2. Posts that link to the old one will still be wrong. Any new graemlins added and used in posts should be ok. In beta 1 when figuring the width and height it put them backwards. It put the width for the height and the height for the width.