Just to let other users know: I used GIMP to generate a background image in PNG format to use with DropDMG. The image was 640x480, but when imported into DropDMG it was scaled right down to roughly the same size as my 128x128 icons. When the .dmg was created, the image was the correct 640x480 size, but the folder was set to open in a much smaller size so only the top left corner of the image was visible.
After much faffing around, the answer is that GIMP by default saves the resolution (i.e. expected pixels-per-inch) in the PNG file. This seems to confuse DropDMG’s layout. If you save the PNG without the resolution info then DropDMG works fine.
An example image showing the problem is attached.