Logo Retouch Assistance

So, for this logo I am making for a friend, he wanted me to use this image for the logo part of it:




In the end, it came out like this:



Which it does not really look good resized... Here is the PSD of the logo if anyone will attempt to make the image inside of it look decent.

https://www.sendspace.com/file/r8qrcc

i think it's good but not the best