Thanks for posting this, it's great! You should consider put it on github to encourage other contributions. I think it's easier to collaborate on something like github.

I modified it a bit to handle a different use case for when the container needs to be sized different from the initial image and also added a couple small feature like maximum zoom-out level and better support for non-multitouch devices. Let me know if you'd like my version, or post on github and I'll fork it