Sue, from Pencilpix blog, was also blogging about poor reference photos so I went searching for a solution. It seems we pet portrait artists get way too many small images that make it difficult for us to do the best job with our pet portraits.
My search for a solution led me to the SmillaEnlarger, an open-source photo enlarger that is free and works very well. It's not perfect but I enlarged a small photo from 421 pixels to 1155 pixels with very little loss of detail.
The only problem I had with it was initially trying to install it. Source Forge software often doesn't usually install the way other software installs and it can be intimidating/confusing to try software from Source Forge. To help figure it all out, I found the following which should be of help in using this software as it doesn't actually install. Anyway, if you have problems, go to the following website or search for using instructions on your favorite search engine.
Hope it helps!