Custom avatars: Use the full picture (zooming out)

I am unable to use an entire image as my avatar.

It's annoying enough that I'm forced to use a circle-crop on my avatar picture. What's happening here is that I cannot use the entire picture -- even at the max zoom out, I can only get a partial. Worse, because it was made to a square, the forced circle means that some parts of the avatar cannot be used no matter where I drag the image.

Potential work-arounds: 
1. Permit a "larger virtual background" on the image. Take the outer pixels, and extend them out to make a backdrop, and then let us zoom out farther, or move the image around, so we can get the whole thing.

... actually, that's a really good simple solution maybe?