It's actually called "ringing" and can easily be explained by the fact that you convolved with a box-function in the frequency space (ideal low pass), which will transform into a sinc function in the local space.
You can actually see it if you look closely -- there is a kind of striping of light/dark horizontal lines, easy to spot at the top & bottom of the image.
you can also try to apply a smoothening function: Usually multiplying by a gaussian in phase space will do, but this will cause your image to be blurred. What would be really impressive is if you could interpolate a pattern in the high frequency signal, and use it to "infer" values for your high frequency padding that "naturally cancel out" ringing to below the resolution of the imag.e
http://www.thefouriertransform.com/pairs/box.php