Its rotated and flipped - thats how it stores the data in the atlas, its normal. Its corrected when drawn on screen, so you don't have to care about that.
With your error - why is the image stretched in your screenshot? Does it look better when you draw it pixel perfect? Also try setting it to point filtered, is it better then?
Can you create a simple repro case for me with this? You can blank out all the non-relevant textures if you want. support at unikronsoftware dot com if you can do that.