Hi ocon, this wasn't forgotten so much as running into a few challenges. The short story is that I don't svg, but after some digging found an example of exactly what I think you want, tested it, decided it could be cleaned up a bit, lost the tidied code ... and haven't been able to find the blog from which I obtained the original.
The short answer is that it does seem to be possible to create an svg inline then call it using background-image: url(#myid). Quite neat really, although as I'm sure you are aware, cross-browser mileage isn't very high. I'll keep looking for the working example I originally found, but maybe that gives you something to go on with.
My other thought was to consider the cause of the problem you are trying to solve. It will depend on how the image is coded, but overflow:hidden may help, or setting the dimensions in %.