Version 1 - Replace in modules/gd/classes/GdToolkit.class:

case 'thumbnail':
        case 'scale':
            /* $parameters[0]: target width, [1]: optional target height */
            $targetHeight = empty($parameters[1]) ? $parameters[0] : $parameters[1];
            /* Don't enlarge images for a thumbnail */
            if ($operationName == 'thumbnail'
                    && $width <= $parameters[0] && $height <= $targetHeight) {
                break;
            }

with:

case 'thumbnail':
            $aspect = $height / $width;
            $targetWidth = $parameters[0];
            $height = round($targetWidth * $aspect);
            $width = $parameters[0];
            list ($ret, $destRes) = $this->_resizeImageResource(
                $sourceRes, $width, $height, $hasTransparency);
            $this->_free($sourceRes);
            break;

        case 'scale':
            /* $parameters[0]: target width, [1]: optional target height */
            $targetHeight = empty($parameters[1]) ? $parameters[0] : $parameters[1];

Version 2 - replace in modules/gd/classes/GdToolkit.class:

case 'thumbnail':
        case 'scale':
            /* $parameters[0]: target width, [1]: optional target height */
            $targetHeight = empty($parameters[1]) ? $parameters[0] : $parameters[1];
            /* Don't enlarge images for a thumbnail */
            if ($operationName == 'thumbnail'
                    && $width <= $parameters[0] && $height <= $targetHeight) {
                break;
            }

with:

case 'thumbnail':
            list ($width, $height) = GalleryUtilities::scaleThumbnailToFit(
                     $width, $height, $parameters[0]);
            list ($ret, $destRes) = $this->_resizeImageResource(
                $sourceRes, $width, $height, $hasTransparency);
            $this->_free($sourceRes);
            break;

        case 'scale':
            /* $parameters[0]: target width, [1]: optional target height */
            $targetHeight = empty($parameters[1]) ? $parameters[0] : $parameters[1];

and add to modules/core/classes/GalleryUtilities.class:

function scaleThumbnailToFit($width, $height, $targetWidth, $targetHeight=null) {
 	$aspect = $height / $width;
 	$width = $targetWidth;
 	$height = round($targetWidth * $aspect);
 	return array($width, $height);
     }