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Anyway, I ended up with Photoshop—albeit poorly because I shot with WCON-08E Wide angle which distorted the edges and no amount of fiddling with distortion and transformation could properly fix it...
Try Paint Shop Pro 8 +. Its Adjust, Lens Correction, Barrel Distortion Correction... option works perfectly for my C-5060 at the 27mm equiv. zoom setting. Since all the digital cameras and lenses that I have checked suffer from barrel distortion at this focal length I wonder why the PSP algorithm or similar could not be incorporated in camera firmware. Since most photographers seem not to be worried by or do not notice BD and it would slow up the memory card updating it could be a default Off option in the camera's menu.. How about it, Olympus?