How Do I Stop My Images from Going Blurry (at least in part caused by W3 Total Cache)?

Issue Background
I have noticed that enabling W3 Total Cache with my settings causes all images on my website to go blurry. Turning off all my caching (W3 Total Cache + Cloudflare) causes the home page hero image to be blurry for a few seconds and then go sharp while all other images constantly remain sharp.

W3 Total Cache Configuration

I do not use W3 Total Cache’s minification functionality since Cloudflare takes care of my minification. (Nevertheless, I doubt that it is Cloudflare’s minification that causes the images to go blurry as they look sharp when Cloudflare is enabled but W3 Total Cache completely disabled.) My approximate W3 Total Cache settings can be found by reviewing this page (the main difference is that I do not use a CDN): http://www.onlinemediamasters.com/w3-total-cache-settings/

Website in question: http://www.paradigm-zero.com

Any help to resolve this issue is highly appreciated.

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