How can I prevent height/width attributes on images run through the theme system?
History
In Drupal 6, populating width/height attributes caused a filesystem lookup (bad for back-end performance) for every image. This was fixed in #908282: Remove unnecessary I/O from theme_image() by removing the height/width attributes altogether in Drupal 7.

Images without height/width attributes are bad for front-end performance so work was done in Populate HTML image tags with dimension attributes (like D6 imagefield) without re-introducing I/O to add them back.

Answer
So you really want your images to have width/height but obviously not if they get distorted. The update functions for 7.9 were supposed to fix this, did you run update.php after upgrading to 7.9?

If you ran update.php then this might be a bug.