While I received a few e-mails from others wanting the same, no one had a solution for me and so I had to fight off empathy and figure it out on my own (even though I was told it couldn’t be done). I would have typed this up sooner, but a good friend of mine is currently working with a new social-networking startup and thought that I might be able to use this (+ some other Image Magick/PHP voodoo) to make a quick buck, and so I had to wait for that situation to resolve itself.
Without getting into the details and at the same time gracefully skirting around how much time I spent on this, I’ll just show you the command and tell you what you need to change if you want to do it for a larger/smaller thumbnail.
convert filename.jpg -thumbnail x170 -resize '170x<' -resize 50% -gravity center -crop 85x85+0+0 +repage newfile.jpg
The above is for an 85×85 pixel thumbnail. Notice that the first two numbers (the 170s) are twice the width/height of the final thumbnail I wanted to create; given those relations you should be able to deduce what you’d need for a different sized thumbnail. Note that this command sequence also seems to work quite well for portrait images (i.e., where the height is greater than the width).