Customizable Analog Clock plugin by XorBin.com
Remember to check "Time zone" checkbox, in other case, time zone parameter is ignored.
Check if input field of the "Custom clock skin" is empty.
You can upload custom skin using Media upload feature provided by WordPress (login to your WordPress administration and select "Media->Add new"). After you have uploaded new skin, copy "File Url" (location of the uploaded file) field and paste it into your Analog clock widget configuration panel, "Custom clock skin:" field.