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are you holding down the shift key as you do the transform that way it constrains the proportion. if it is a dramatic change you may want to make the selection copy it to a new layer then right click it and select the layer and convert to smart object that way you can transform it as much as you like as long as you hold down the shift key you can make it smaller and larger as many times as you like. If it is not a smart object each time you transform it then it will loose quality.