I suspect that there may be a conflict between the BODY coding and the #canvas coding. As I recall from when I was messing with my journal layout, Body may actually lie on top of Canvas. Now, in the layout you're linking to, the #body coding currently looks like this:

BODY {
background-image: url('http://i40.tinypic.com/6ye9ft.png');
background-size: 200px;
background-repeat: repeat-x;
background-position: center top;
background-color: #EDEDED;
color: #393939;
font-size: .95em;
margin: 50px 0px 0px 0px;
font-family: arial narrow, verdana, arial, sans-serif;
}

That's what's controlling the header background as it currently exists in that design. So my first suggestion would be to copy THIS into your custom .css and swap out the current background image with the one of your choice, and the dimensions you want, and start playing from there.

It's been about a year or so since I've actually played with any of this stuff, so I'm pretty rusty, but I recall dealing with a lot of body/canvas conflicts back when I did.

Edit: Augh, or not... I thought you had linked to a journal that actually displayed the layout in action, but that's not the case. Sorry. Disregard the attached code... that's the layout visualwit is using in their own journal, not the layout you were specifically linking to. Sorry! Checking some more.