Finite Larmor radius effects are incorporated into near theta pinch magnetohydrodynamic theory following the method of Pearlstein and Freidberg. By a straightforward solution of the eigenvalue problem with finite Larmor radius effects included, the stability of various diffuse profile configurations has been investigated. The results differ qualitatively, as well as quantitatively, from sharp boundary theory, and it is not true, in general, that the stabilizing effect is absent form= 1. It is found that fat plasmas can be completely stabilized by finite Larmor radius effects.