It needs to be 80x80 pixels, have you tried that small?
That is odd, this is what mine says;the note on the edit avatar says "Note: The maximum size of your custom image is 140 by 80 pixels or 48.8 KB (whichever is smaller)." the one I created for her is 140X80.... I had tried it as my avatar and it worked... I think she is having trouble getting the pic from my photobucket URL to her Photobucket account and then getting her account URL to the custom avatar