Select the crop position of your thumbnails.
Despite the screenshots and the documentation implied this, it's a feature that is not included this version.
Close, oh so close. WP 3.5.1 Currently has a photo editor flaw, and this is the closest fix that I can find. With the exception of loading a low resolution thumbnail, this allowed me to at least narrow the problem down to WP as opposed to the theme that I purchased.
If it weren't for the low res photo, I would give this a 5