Zoomed, bent, and grainy - did you take a full panoramic with even high skies, or just a few shots along the horizon?

If you take and put together a full 360 degrees of pictures - including higher skies - it won't be stretched and if you've got a higher res digital camera to work with (5MP or better) than it won't/shouldn't be grainy enough to notice.

If you only took a couple of shots of the horizon, think about it - it has to stretch upwards and to the sides to evenly cover the underside of a perfect shpere - or for just upper hemisphere the underside of 1/2 of the sphere. Either way, if there's not enough info it will stretch all the pixels unevenly and add grain in the process.

Yeah, this requires more than a bit of work in PS.