Yeah weird. The one time I saw something even close was a some reboot. Try setting the wallpaper from the gallery itself? Or the wallpaper setting within settings? Try changing the way you set it. There's a few different ways. But haven't seen wallpaper do this before especially if sized to the screen size if the device.
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It's not the ROM. It's something Gravity and xgels does. I tried with a different wallpaper and did the same thing. Works just fine with the ROM by itself.
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