The fact that it was over-pixeltated was a dead giveaway. Any matting or airbrushing that shows obvious edges can blend more easily after you've added them by changing the resolution. Some photoshop applications have a blur or a smudge tool to blend the edges of soemthing into the base image. Layering can also be disguised some by simply changing the resolution and color depth to increase the pixelation of a photo.

This hack probably spent 3 whole minutes with this spoof. My 15 minute mockery posted above is an example of slightly better work I did while I was sleeping. :)

Update: More on all this nonsense at Pajamas media and Michelle Malkin.