Okay guys, I fixed the issue with some help. Here's what's happening. Windows 8 is definitely downgrading the quality of all of our backgrounds. I believe this is in an effort to speed up the system by working with smaller files and using less memory. When you set an image as your desktop background in Widows 8, Windows saves an extremely lossy JPEG from your chosen image and puts it in a designated folder. This is the image used as your background, and it is a highly compressed duplicate of the file you chose. In my opinion, it looks bad, but if it's not bothering you, then I wouldn't worry about it, it may effectively serve a purpose (but I can't imagine how).
To get the wallpaper to look good again, you'll have to trick Windows (who doesn't love fooling machines?) into thinking it is using it's compressed file by finding that file and replacing it with a file of the same name and extension, only at a minimum compression setting. Refresh the display by right clicking the background to see if you were successful. In some instances apparently the display will revert after a reboot, but mine has not. To learn where that file is located, look here: Windows 8 Compresses Wallpaper - OverclockersClub Forums Let me mention that to perform this fix, hidden files and folders must be visible.
Find fredknex's post and follow his instructions. It seems he refutes his own findings by the edit he posted, but it worked for me and I have rebooted and refreshed multiple times since then. Windows 8 may or may not fix this issue in the future, but if it's bothering you as much as it bothered me, you can easily fix it yourself now.