In previous work, we presented a statistical model of natural images that produced outputs similar to receptive fields of complex cells in primary visual cortex. However, a weakness of that model was that the structure of the pooling was assumed a priori and not learned from the statistical properties of natural images. Here, we present an extended model in which the pooling nonlinearity and the size of the subspaces are optimized rather than fixed, so we make much fewer assumptions about the pooling. Results on natural images indicate that the best probabilistic representation is formed when the size of the subspaces is relatively large, and that the likelihood is considerably higher than for a simple linear model with no pooling. Further, we show that the optimal nonlinearity for the pooling is squaring. We also highlight the importance of contrast gain control for the performance of the model. Our model is novel in that it is the first to analyze optimal subspace size and how this size is influenced by contrast normalization.