A galaxy far, far away

The Hubble space telescope has recently discovered what astronomers believe to be the most distant galaxy ever seen (or imaged).

The red smudge is a galaxy some 13.7 billion light years away. That means that the light that we see here left the distant galaxy 13.7 billion years ago. And that means that the galaxy that we see here existed as we see it only 420 million years after the big bang.
And that might be a bit of a problem.
Does it take only half a billion years to make a galaxy? Nobody knows for sure, but certainly the things don't just appear suddenly. At least that wouldn't fit into any present theory of galaxy formation.
How big is it? It may be impossible to tell, but if it's the size of our galaxy, light would take 100,000 years just to travel from one end of the galaxy to the other end. That's a pretty big thing. Could something that big form in 420 million years or less? Hard to say.
Seeing galaxies this far away brings into question a couple of things- one, maybe the current estimate of when the big bang happened (14 billion years ago) may be incorrect, or two, maybe the assumptions that we're making when measuring great distances are incorrect.
Either one is hard to swallow, as all our theories on physics and cosmology rely on them.
And here's a gem: what if we look in the opposite direction in the sky, as see another thing 13.7 billion light years away!?!
I fear that we know a lot less that we think we know...