My WP Media Settings are ignored

Link please to example page/post. Also, a screenshot of the issue you’re seeing in IE8 if you can.

Looks like this is a known bug with IE8.

Try removing:

#content p img {
max-height: 1024px;
max-width: 1024px;
}

and adding:

img {
height: auto;
max-width: 100% !important;
width: auto;
}

Wonderful. You’re welcome.