With a previous version of the theme, it was using non-wordpress resizing and cropping techniques making it incompatible with external media plugins (i.e. using with s3)
Looks like that has been fixed, bravo!
However, maybe seeing a hole. Noticing that when I remove an embedded image (via the red x button) and then click save (which will have been renamed and seized with new dimensions outside the standard wp thumbnails) noticing it still says on the server....is there a method in place that deletes the image...or perhaps that was forgotten and a bug?