I just got a new Nexus 7 version 2 and yesterday, i had this problem where i send pictures to a friend in hangout and it turned out blurry. Then, i try to send pictures to myself and see if it's normal but it turn out the same. I also send through Facebook messenger and it is blurry. So, i decided to try and error. I went to setting and delete the cache data. Surprisingly, my facebook messenger picture that i sent became normal but my picture in hangouts is still blurry. Please do not ask to solve by introducing GOsms because it doesnt work on mine! Does anybody know how to solve this problem? Really appreciate who can help me because it's driving me nuts here. Thanks a bunch !! 
