This is an addendum to my original post, including a cumbersome "fix," and a working hypothesis as to the root of the problem.
(In my original post, I had neglected to update my signature to note that my current OS is 10.6.4.)
Last night, I extracted the artwork of the nonstandard covers (I'll call "standard" artwork that which is 600x600, as well as other art of that 1:1 ratio).
Assuming that the width of all the nonstandard artwork was 600 pixels, the affected artwork was that which was 540 high and higher. Nonstandard artwork that still appears normally is 539 and shorter. The 600/540+ (bad) vs. 600/539- (good) appears to be a ratio that affects artwork of smaller sizes as well. For example, a file that was 467 pixels in width that was "too high" (420) would also be affected. (I have some artwork that is smaller than 600 pixels, but none is larger, so while I assume larger images will be affected, I don't know for certain.)
When I extracted a 600x540 file and resized (or rescaled) it to 600x539 and then embedded the new art, coverflow displayed the artwork correctly. I have done this for all the affected artwork and this has "fixed" the problem.
(I've read that a number of people are currently having problems adding artwork so, for the record, I copy an image open in Preview and, then, in iTunes, I "get info" for the files to which I want to add artwork and then paste the artwork into the artwork box seen in the "Multiple Item Information" window.)
However, this only fixed the problem for view in coverflow. It did not fix the grid view. Those files were still being stretched until I "jiggled" the size of album covers in grid view. I slid the sizing bar back and forth, to make the albums first larger and then smaller, and then I eased the size back to its original position (in my case, as large as the grid view will render four albums in one row before they become three to a row). So, no kidding, once I
shook iTunes, grid view worked again.
Armed with this information, I sat down with a similar system (my wife's), another 13" Macbook running 10.6.4 and iTunes 9.2.1, and I attempted to replicate the problem; her iTunes library is unique but contains some of the same music files with the same artwork that had appeared distorted on my system. Two careful examinations of the music library had not shown any distortion to this system's extant artwork but, when I added nonstandard artwork of the problematic ratio (and files that had said artwork) I saw the same problem on my wife's computer that I seen on mine.
I can offer the following additional information:
12 May 2010 is the last known date on which I embedded a file with "problematic" artwork that displayed said artwork properly in coverflow.
On 26 July, I extracted a nonstandard artwork image, touched it up, and embedded that "airbrushed" art into the music files. This is the album cover that I first noticed to be stretched. However, while I noticed it yesterday afternoon, I do not recall noticing it on the morning of the 26th, when the new artwork was added. (And this does not necessarily mean anything; I may have been inattentive.)
While wrangling with that album cover yeterday and trying to get it to display properly, I did not notice a problem with any other album cover (but I did not look methodically). After wrestling with that album and failing, I quit iTunes, tossed the album art cache in the trash, and rebuilt. It was at that point at which I noticed distorted artwork en masse.
I am open to other ideas, but my working hypothesis is that, at some point in time, within the last week or the past two months, iTunes (by which I mean the most current version of iTunes on a Macbook running the most current version of Snow Leopard) has become incapable of caching these nonstandard images. The extant thumbnails of the "problem covers" were fine, but once I tossed them into the trash and iTunes needed to reconstruct them, mayhem ensued.
Even though I have hit upon a workaround for our computers and will avoid adding problematic art to our iTunes libraries, I'd still be curious to know what's behind the problem and if there is an easier fix than the one I found, which is not a fix inasmuch as it's the "don't move your arm like that" when your arm hurts solution.
For what it's worth and thanks in advance,
N.