Would it make a difference if the media was previously generated by timthumb?
I've copied the upload directories to a new server and I'm using a new theme now that I believe does NOT use Timthumb. That's what's active now -- and other people have successfully used your plugin with that theme.
Unfortunately, at the moment of typing this, I have a maintenance redirect up to block all IP's but my own so I cannot link you to it. Just wanna know if the previous theme which used timthumb could cause a Unknown Failure Reason error now?