OK, I took your 0.gif, rescaled it larger by 300%, blurred it and shrunk it back by 33% (I couldn't do 33.33333%) and got the following 0-new.gif.
Is this better than the photoshop one, on your ereader?
If it is, then you should perform your image manipulations at a higher dpi (dots per inch), then resize back down to your final size.
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