I have this pixely layer which I need to scale 200% in both directions. Since the pixels should be exactly double the size, I expect no anti-aliasing. (fuzziness). However, the newly sized image is all blurry.
How can I overcome this behavior?
Up-scaling bitmaps is VERY hard, as you're trying to make expected data out of nothing.
Since the scaling can't just guess what's should be used to fill in the gaps between existing pixels, imaging software (usually) either duplicates a neighbouring pixel (which tends to make almost overly crisp edging) or calculates a mean value between neighbours (which tends to make things slightly fuzzy).
One of the things you can try is upscaling it in steps of like 8-10% each time, perhaps making sharpening corrections at each step.
I also found this other little trick that may work for you (using an indexed colour mode and up scaling with DPI vs. just dimensions).
Hope that helps...
cmd + K, then choose at
No anti-aliasing will be applied when scaling.