It's official. I have been messing around with this loads today and basically there is no way you can set your wallpaper without it pixelating to hell, unless you use a stock image. You can use the free app 'Image 2 Wallpaper' which let's you set wallpapers as tiles, but other than that, you can kiss a nice looking homescreen goodbye. Very rookie to have made such a visually detrimental change in 4.3.
Posted via Android Central App