Burvey re: your capx, if the sprite is not square it will distort. The aspect ratio of width and height cannot increment at the same rate.
my sprite was 100x60 and grew distorted (flat looking) and then when it approached full size it finally stretched out to normal, but the transition is not what the OP is talking about.
I'm still looking for the best way to do this.. probably scale? If I find out I will post it here.