Step 1 : Start at any size this can be done for sigs or wallpapers, transparent is preferred .Take your cut picture and put a Filter>Blur>Gaussian Blur on it with 31 radius (intensity).

Step 2 : Duplicate all of your layers and cover the whole backround. See picture.

Step 3 : Make a new layer. Take a nice fractal Grunge brush and brush around.  Put it the last layer. On the bottom.

Step 4 : This can be also done earlier . Change all of your Layers except the brush to overlay to give a nice color. You can change opacity or other blending modes. See picture.

Tutorial written by Norair.