There are several ways to do this. Here is how I did it.
1. Used the pen tool to create a selection around the photo, INSIDE the white border.

2. Created a new layer with just the selection on it.

3. Used the Magic Wand to select the sky with "Contiguous" unchecked.

4. Turn off the bottom layer and create a "reveal all" layer mask (white with black where the sky is.)

5. Paint with a white brush the boy's hat, the sidewalk and all other non-sky parts of the selection.

6. Use the measure tool to obtain the tilt angle of the image.

7. Crop and rotate appropriately a blue sky from another image and copy and paste or drag the sky to the original image.

8. Drag the sky layer from the top to just above the background layer and position appropriately.

9. Use white and black brushes on the layer mask to "clean up: the image.

You did a very nice design on the cover. Here is my result (without too much effort being spent on the "clean up."

http://www.pbase.com/image/18018597.jpg
George Burke