Couldn't the resizing of external avatars be prevented by using the GetImageSize function to check whether the image is smaller than the limit the administrator has set? If it is within limits, it could be allowed to go unresized, if above the maximum, it could be sized down to a percentage of the original or to a pixel size, like 65x65...
Will this be too much of a pain in the ass due to the code being ported from YaBB? It seems to me it shouldn't be, but I haven't looked at all at the code for YaBB SE yet. I'll dive in soon.
I suppose the place that might cause trouble is trapping for errors if the requested image doesn't exist. I dunno tho, you tell me.