I had the same problem. I just cropped a picture I wanted to use, sent/saved to phone, edited existing contact picture, and replaced the picture with the one I wanted. Now my picture shows, and not the bad one that was synced from where ever. It took a while because I had to do about 50 of them one by one, but it was worth it.
Moto Defy Green Lens - CM 7.2 / Android 2.3.7
Moto Defy Red Lens - CM 7.2 / Android 2.3.7
Nexus One - CM 11 / Android 4.4.2
Galaxy S II - CM 10.2 / Android 4.3
HTC Desire HD - Stock GB / Android 2.3.6
Galaxy Note 3 - Stock Rooted KK / Android 4.4.2