First Image From Post & BFI Thumbs?

Featured image shows up fine in blog listings, but gray image is shown instead of first image from post – http://monkeyzbusiness.com/

Thoughts?

Functions.php

function get_first_img() {
	#echo "get first image";
  global $post, $posts;
  $first_img = '';
  ob_start();
  ob_end_clean();
  $output = preg_match_all('/<img.+src=[\'"]([^\'"]+)[\'"].*>/i', $post->post_content, $matches);
  $first_img = $matches [1] [0];

/*
  if(empty($first_img)){ //Defines a default image
    $first_img = "/images/default.jpg";
  }
*/
	#echo $first_img;
  return $first_img;
}

get_first_img() is grabbing the correct image url. I echoed it to make sure.

loop.php

<?php
	#if featured image is not set, use first image in the post.
	#if(get_first_img() ){ echo '.'; }
	if ( has_post_thumbnail() || get_first_img() )// check if the post has a Post Thumbnail assigned to it.
	{
		#echo "has_post_thumbnail() | get_first_img()";
		echo '<div class="blog_img  ">';
		echo '<a href="'.get_permalink().'">';
		if( (get_post_meta( $post->ID, 'kaya_image_streatch', true )) == "0")
		{
			$params = array('width' => '1100', 'height' => '450', 'crop' => true);
		}
		else
		{
			$params = array('width' => '', 'height' => '', 'crop' => true);
		}

		if(!$img_url=wp_get_attachment_url( get_post_thumbnail_id() ))
		{
			$img_url=get_first_img();
		}

		#Test
		#echo $img_url;

		echo kaya_imageresize($img_url,$params,'');
		echo '</a>'; ?>
        	</div>
      <?php }   ?>

Thoughts?

Thanks!