Works ok for me.
New project, 1280x760 for Project and Layout size, dropped snowcastle_final.PNG onto Layout, looked ok, clicked preview, still ok.
Am I using the correct settings?
Using Firefox 59.02, Win 7 x64 Pro, C2 x64 r255. So only difference I see is you using C2 x86.
This is why you MUST follow the Bug Report Requirements.
If you had, it may show an issue with just the 32 bit version of C2, or it may look fine.