Blurry images when running my application on Retina iPhone

Question

When creating my application for iOS I don't know why but all of my images are blurry and poor quality. They look perfect in photoshop and in preview within Xcode, however when in simulator and testing on my actual device (iPhone 5) they look poor and blurry. They are high res images and I have made them to iPhone image size of 640 x 1136 pixels. I have also added both standard images and @2x. 'This is what they look like in preview:

And this is what it looks like in simulator (and on my device). Sorry the top is cut off as I am on my Macbook Air and not iMac.

I am loading my image by the following code:

        CGRect screenBounds = [[UIScreen mainScreen] bounds];
    if (screenBounds.size.height == 568) {
        CCSprite* background = [CCSprite spriteWithFile:@"background_light_iphone5.png"];
        background.position = ccp(160, 284);
        [self addChild:background];
    } else {
        CCSprite* background = [CCSprite spriteWithFile:@"background_light.png"];
        background.position = ccp(160, 240);
        [self addChild:background];
    }

Any help is appreciated. Thanks for your time.