You want to fix your distorted or oversized banner/logo that is displaying in PayPal.
The header image you have uploaded to Website -> Settings -> Website Banner will appear in your PayPal account.
Removing, resizing, and re-uploading the banner in your Website -> Settings will remedy it's distorted appearance in PayPal. The image should be 940 x 200 pixels in size and 72 dpi in resolution. Supported image formats include jpg, tif, bmp, gif, and png.
Please resize your website banner to the appropriate size and upload it again.