The photo looks more like the chain is stretched out rather than too wide - otherwise it wouldn't fit right on any of the cogs, but it fits fine on the distal cogs and rides up on the top cogs.

Can you confirm that's a new chain? Can you measure it?
Does the chain "catch" on the teeth and then release while you're slowly turning the crank?
Does the chain float on top of the cogs and then snap in to place at the high tension spots?