I don't think people are nuts for having concerns regarding the possibility of libel, or a libel suit. The pictures are good for a quick giggle at best, but that's about it. I get this sort of thing from my creepy brother-in-law, who thinks this sort of thing is funny as hell. (He also gets a kick out of calling my wife and kids childish names, like calling my wife, Peggy, "Piggy...") I agree: Moore is is a clod, and a propagandist; he's hamfisted and crude, with little to offer an intelligent debate.
But, having said that, there's the real potential for trouble. Sorry, guys: gotta call it as I see it. Moore is still a private citizen (even if he is a celeb), unlike Bush, who's a public official. There's a serious question about fair comment. I'm not sure what the libel laws are like regarding the Internet, but my suspicion is that it's not very different at all. And you ought to consider what a guy like Moore would do if he saw the photoshop work. He takes himself extremely seriously; I'd bet he'd be on the phone to a lawyer inside of ten minutes.
Just a thought, all. I could be completely wrong, so take it in that spirit.