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I'm using this template:

enter image description here (source)

I have my own image that is 1136 * 640: the size of the smart object that depicts the contents of the iPhone 5 screen. When I drop my image onto the smart object, it is 1.5x the normal size (stretched) and I can't use Free Transform, as it's greyed out.

What am I doing wrong?

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closed as too localized by KMSTR, Yisela Jun 6 '13 at 4:08

This question is unlikely to help any future visitors; it is only relevant to a small geographic area, a specific moment in time, or an extraordinarily narrow situation that is not generally applicable to the worldwide audience of the internet. For help making this question more broadly applicable, visit the help center.If this question can be reworded to fit the rules in the help center, please edit the question.

Are you double clicking on the smart object layer (it is highlighted below)?

enter image description here

double clicking it will open the smart object as so:

enter image description here

I used the template with this image from a search for 1136 x 640:

enter image description here

and my results are this:

enter image description here

works fine for me so I think you are entering in the wrong settings or are mixing up the width x height

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