Sounds like an interesting game...
I have no problem with the scale on Kong, but it might be how you're using it that's the problem. Try reverting back to a scale of 1.0 and the original window size setting in c2, but in the Kong upload settings use 480x432 - just make sure the c2 game setting is set to letterbox scale. It's hard to make any other guys without seeing a capx or at least shots of your settings and code.
If you want to avoid blurry browser reproduction, gave you tried a game setting of 160x144 with letterbox integer scale?