I've never noticed an aspect ratio mutation in the thumbnail. Certainly it is cropped to the center of the input photo, but not (to my eye) squashed or stretched. Perhaps I should look again.
In any case, your idea of creating custom thumbnails is a classic one. Simply supply the synther with a square image of your choosing, click the "Use Selected Photo" button in the upper left corner, and that thumbnail will be uploaded and used, even if you remove it from the synther before you start the synth.