The Shop theme is supporting Woo plugin according to Woo specifications, and changing image size is working without problems. See on my local, original size is 300x300 http://screencast.com/t/lBjUocYjEQg , and after changing size from Woo settings to 300x350, and running regenerate thumbnails plugin (install plugin from Alex Mills https://wordpress.org/plugins/regenerate-thumbnails/ guy who work for WP and his plugin works great) image sizes are changed http://screencast.com/t/RzQjkKBUfMD
This means that you are not doing something correctly, or hosting server timed out while running reg. thumb. because of low php directives or low server resources.