Your wallpaper setting is apparently not working properly. Normally, under iOS 8 the picture should stay exactly as you frame it when using it as wallpaper. Have you tried a reset on your phone? Press and hold both the home and power buttons until the Apple logo appears, then release both buttons and wait for the phone to restart. If this doesn't work we'll try something else.Ummm, I like that it now fits the screen, but not to the point where the pic is smaller than a thumbnail.