The resizeToParent plugin will not work if the image parents are set to display:none. Because the resizeToParent plugin waits for images to be cached it will not run until after most of the slides are already set to display:none.
Initiate the slideshow programmatically using $('.slideshow').cycle() after running resizeToParent and everything seems to work as desired.
function cropSlideImage() {
$('.slideshow img').resizeToParent();
}
$(document).ready(function() {
cropSlideImage();
$('.slideshow').cycle();
});