You may not like what I'm about say but I'll say it anyway
I'm just trying to clarify and perhaps help.
1. Colors will always
differ from what you see on your monitor and what you get when the artwork is printed. And there is no "they" to blame. It's just how it is. And yes sometimes it can be disappointing. Tip:
from my experience with Adagio labels oranges, reds, yellows, blues print better. Greens - not so much.
2. Most people are reluctant to admit it but most people have hard time with resizing images properly hence the stretching and image distortion.
The image you used probably was not the correct size. In fact, I'm pretty sure it wasn't.
Almost no image will be the exact size you need: it also might be a different proportion than the print area so you would have to adjust. Tip:
use larger images and use http://www.picnik.com/
to resize the image properly. Take time and listen to the tutorials.
Also why didn't you use the preview? When you put your cursor over the label it shows your label pretty accurately.