Thanks to "Fotografer" on the Retouching Forum I found I could fix the background in Photoshop Elements with the Dust and Scratch Tool, which is under the Filter>Noise menu. After cloning out a few minor folds I used the Magic Wand to select the background and then went to Select>Modify>Contract and moved the selection away from the fur because I didn't want the hairs blurred by the Dust and Scratch tool...I then feathered a couple of pixels. I am happy with the results. (Picture looks a bit softer because I didn't sharpen after resize down)