You're right, I think only the first half of the logo really needs to be in that area (like a slice of it...) just to make it intergrated into it...
I think a re-design would be the most appropriate action to take. Everything in it's current state would still need to be scaled down dramatically. Problem with that is I've worked on the psd and the images are rasterized which means there could be a drastic quality loss when it comes to re-scaling them down.
@ John: I would create the vb signature with the pen tool so it's still in it's vectored form, that way, the re-scaling will go without any quality loss whatsoever. I also think that you should change the font on the main heading to something like pheonix and use a pixel font for the sub-heading/slogan.
I think with all that said, I would go with a re-design rather than re-scale everything from the current logo, it could prove to be a bad move.
Thanks for all the feedback! All are very good suggestions and I will play around with the design and layout some more and see if I can improve it I hope the design doesn't outweigh the purpose of the site and thats the review/directory system