Photo capture, manipulation, and upload in iOS6 Safari
port3000.co.uk
port3000.co.uk
It's hosted on a AWS S3 instance, no server side code. I love how much power a simple static html/js/css site can have these days and it's getting better every day.
I also ran into the exact same issues, rotation and squashing. I did a small work around for the squashing, not in a great way but it's in the js file.
I think the main use for this is going to be uploading images at a reasonable resolution. On mobile, you rarely want to upload the full 8 megapixels from the camera. The fact that you can scale it down client side is awesome!