Mug engraving issues

So i have a bunch of these mugs I am trying to engrave on my roller style rotary… The engraving area circumfrence is smaller then the edges of the cup that roll on the rollers… This is causing the images to be squished. I have tried increase and decreasing steps per revolution by 1000 up and down, i have tried increasing and decreasing the roller size. nothing really seems to be making much of a difference.
Can anyone point me in the right direction as to what i might be missing? Those rectangles are supposed to be squares… close but no cigar lol

Mugs with sides that are flat work perfectly.

Are you sure the handle isn’t hitting the roller and stopping the mug from rotating. That handle is awfully close to the rim of the mug. It looks like it would interfere with rotation.

Its not quite as close as it looks there is plenty of room. Unfortunately that is not my problem.

as a work around for the moment stretching the artwork in photoshop is working but is obviously not a great solution lol