'Make Tabbloid' integrates with the www.tabbloid.com service to create printer friendly 'tabloid' edition of your WordPress blog.
If you get permission errors make sure that the script has writing rights in your blog directory. Try to creating a file with your chosen pdf filename (e.g. mytabbloid.pdf) manually, upload it with a ftp program and set the rights to 777 with CHMOD. A good tutorial for changing file permissions can be found on the WordPress Codex.
Either Tabbloid is struggling with your RSS feed or your feed is making its way to the front of the queue to be tabloided. Try going to http://www.tabbloid.com, adding your feed url and clicking 'Generate sample issue now'. If it doesn't generate a PDF either wait an hour and try again or drop a line to the techies at Tabbloid.
The thumbnail is generated by http://view.samurajdata.se/ so there may by a problem with the 3rd party site. Images are also cached for 3 days so changes may take this long to filter through.