This is the best way to do it.

1. Open LockBackground.html (in the folder of your theme)
2. Find (LockBackground.**** png or jpg whatever is the default txt)
3. change the entire string to /private/var/mobile/Library/SpringBoard/LockBackgroundThumbnail.jpg

NOW essentially you can use any photo from your camera roll but the quality doesn't seem to be retina. Still working on it :).