We suggest always choosing the 3 Header Images option and leave the third option blank. 
  1. Navigate to Communities > Special Events > Friends Asking Friends > Kintera Thon
  2. Hover over your event name and select Website Info
  3. Click Website Design
  4. Under Site Images, select to display 3 Header Images
  5. Select Save
  6. Navigate back to the Webinfo Checklist and click the green Publish This Event Now button
Note: If the image still appears distorted, the logo may be too large and will need to be resized using a photo editing program to 384px X 101px.

If the image is still distorted Chat With Support and reference this article.