New iMovie and stretched images

Trying out the new iMovie, slowly resolving many of my initial fears (projects IN events?) — but one thing has stuck: I do a lot of movies using still images and these are causing a real headache.
The "updated" projects from the old iMovie have very odd positioning of the clips containing photos: you can see in the attached screen shot that the image, which used to fill the screen, is now dropped to lower left. I could crop it manually — but I have 100 of these!
And creating a new project and dropping images in stretches the images from 4:3 (or whatever they are) to widescreen, with no evident way to avoid it or change it.
Anyone else seeing this? Anyone see a fix?

Tom,
So talking frame size, scanning them in at 72 dpi, would still project a smooth, clean looking image?  For the projector, the frame size will be pretty large (as in 120" 16:9 diagonal).  Would this 72 dpi still be efficient enough?

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    I tried to do target disk override from Remote Desktop but it won't let me choose my other Mac's Remote Disc as a boot option.  It also continues to show the Server as "Offline" even though power is on and it's on the network.
    I would do my 2010 Air's USB drive - just to do a Disk Utility and see if it's a drive problem - but I can't tell the Server to boot from the USB stick.
    Tried using my iMac as a monitor, that worked for a while, now it just flashes and then goes back to the iMac.
    I'm thinking the logic board on this thing is about to die.  Which is unfortunate, since my company opted out of AppleCare for this piece of equipment, and the 1 year expired last month.  So...if the repair is going to end up being $800, they're going to have to pony up for a new server.

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