wordsetc,
i agree with cfire that it does look like a lamp actually that is what i thought at first, as i scrolls past yours to post my image. one way to fix the jagged edges around your image (i am sure there are many ways) but the way i find that is the easiest for me is keeping the eraser brush hardness at zero, and then just adjusting the size of the brush to however big or small you want or need then erase it should make your image flow with the rest of the picture, and not like it was place on top.

hope this helps
xoxo
amerianna.