trisha
I was observing the template closely and I've noticed the header image doesn't really blend with the background image in the header... check it out yourself! Though most of the people won't even notice it...
The problem lies in the .psd file you've provided... here's what I did to fix the issue... I deleted all the images all the layers in the .psd file including the background layer but excluding the text layer, then saved the image file as .png...