I can think of three options:

1. Lightbox: very simple, a lot of people uses it for that reason and
also it doesn't look bad.
2. Going back and forth: Annoying, as you stated.
3. Edit it right there: make the "ajax upload" of a pic and load it
into a thumb size box (all in the same page) make the user to move the
picture to get the thumb result and if you want to get fancy put a + -
so they can zoom. I think this might be the thing you are looking for
but I think it will be REALLY difficult to accomplish.

Just my thoughts...

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