by any chance are you using Menu Overhaul by DLBP?
If you're using it.. try clearing the cache.. I'm not sure if this only works when you have DLBp mod.. but if you see a cache folder in your mod folder try clearing the content anyway..
I tried using that image and it works for me, its a bit low quality and not the right ratio, so its a bit messed up..
I advise you either edit the image or find another preferably higher res..