You can change the dimensions. If you’ll edit the images.php file, you’ll see this line:
add_image_size('single', 960, 400, true);
Change the 400 to the number of pixels tall you’d like to have the slideshow be. Then save your changes. That only affect new image uploads. If you’d like to change images already uploaded, you’ll need to use the Regenerate Thumbnails plugin.
You also may need to edit the style.css file and change this down at the very bottom:
#slideshow {
height: 400px;
}
I think the loading icon is coming from the lightbox plugin. That looks like the one that’s bundled with Fancybox. You might try looking there to see what’s going on.
Let me know if you have any trouble,
Bill