Image "Use Original Size" is Incorrect Scale

Hi community, this is my first post. Thanks for any help you can offer.

Problem:

When Insert an image into my form (3"x4") and I choose the sizing dropdown to scale it to "Use Original Size" The Image increases way beyond it's correct scale. Im not sure what Im doing wrong.

Here is a screen shot from photoshop displaying the true size of the image:

Here a screenshot of the problem in LiveCycle:

Any help on this subject would very much appreciated.

Thanks Community!