I used TimThumb to get around this problem.
Upload TimThumb in your theme directory and edit jj_ngg_jquery_carousel.php (plugin-directory -> includes).
Search for this:
$output .= "<img src=\"" . $image->imageURL . "\" " . $image_description . $width_d . $height_d . " border=\"0\" />";
Replace with:
$output .= "<a href=\"" . $image->imageURL . "\"><img src=\"" . get_bloginfo('template_directory') . "/timthumb.php?h=" . $height . "&w=" . $width . "&src=" . $image->imageURL . "\" " . $image_description . $width_d . $height_d . " border=\"0\" /></a>";