Yes you can make that work. Find this in index.css and simply change the height to fit.
#header {
background: url("../images/custom/head-bg.gif") repeat-x scroll 0 0 #262626;
height: 90px;
position: relative;
}Note: You will also need to alter and change the size of the head-bg.gif image to fit as well. Or simply remove it and use a color as opposed to an image.
#header {
background: #262626;
height: 90px;
position: relative;
} 