it is now literally impossible to create an image with crisp edges and have it look correct on the dashboard.
this is because, if you actually create an image that is 540px wide, the tumblr resizer will still resize your image to 500px and then stretch that 500px image to 540px wide, making it look all blurry and ugly.
top image above is an actual screenshot of the staff blog, cropped to 540px. the bottom image is a screenshot of how the top image looks on the dashboard: instead of the crisp antialiased text of the original, it is all blurry. (and of course the bottom image will look even blurrier on dash, because it is also being resized down and then stretched.)
tumblr has a sizable pixel art community, and these users now have no way to present their work as intended on the dashboard.