Part of the problem seems to have been the cache time. I've set the Thumbnail cache time to zero so that when I make changes, I actually see the results.
To get the desired result where the full image is displayed, I have the following settings:
Basic Settings:
Module Mode: Standard mode
Thumbnails
Responsive images: ON
Create thumbnails: ON
Image auto-scale: OFF
Keep aspect ratio: OFF (couldn't set it on but doesn't seem to be a problem)