I finally figured out how to do this (sort of).
Again, easier to do with more than one monitor - I don't know how it would work on a single monitor.
In the Finder, sort the images as you like then right click (ctrl-click) on the first image in a Finder window you wish to see. A pop-up menu will appear with an item about half way down called Quick Look "name-of-image.xtn" (where "name-of-image.xtn" is the name of the image you clicked on). Now, before doing anything else, hold down the Option key. The menu item will change to Slideshow "name-of-image.xtn".
NOTE: You must do it in that order - if you hold down Option before you right click on the image, you get a completely different menu pop up.
When you release the mouse, the image will open up full screen but not full size. When you release the Option key, the image will go full size. However, the image will have focus and arrow navigation won't work, so you have to bring focus back to the Finder window, easiest done by clicking on the Finder window (which is why I don't know how to do this with only one monitor).
Now: if you hold down the Option key while tapping the right arrow key, each image will open up fullscreen and full height/width, regardless of whether it is smaller than your monitor resolution or not.
- Navigation doesn't work in List view.
- In Columns view only Opt-RightArrow is of any use. If you type Opt-UpArrow or Opt-DownArrow you will go to the first or last image in the Finder window. If you type Opt-LeftArrow you will exit out of the folder you're in. Additionally, if you have your window sorted by tags, the cursor gets stuck on the virtual folders separating different tag groups.
- Opt-Navigation works fine in Icons view. No problems there, but having to remember to hold down the Option key becomes annoying pretty quickly.
All things considered, this is pretty awkward. It's a real kludge for something that "just worked" in Lion. I hope it's something they fix for Yosemite, or at least give us a preference somewhere to toggle fullscreen behaviour.