I am having this same issue with the widget.
Everything was working fine prior to the most recent update to 220.127.116.11, and we had probably 20 ad widgets set up in various sidebars.
I followed your advice with the Debug mode, and while I can't give you a link to the site as it's not currently public, I can tell you the debug code appearing within the HTML for every single widget is the same and reads as follows:
<!--ADINJ DEBUG: picked value at position 0: advert_1-->
Just in case, my widget code looks like this:
<div id="adinj-9" class="widget adinjwidget"><!--Ad Injection:widget_9--><div style="background-color:#656565; width:250px; height:250px;">
<h5>TEST ADVERT 250X250</h5>
(These are fairly uniform placeholders for now.)
This is pasted under "Ad Code 1" block within the widget, all other settings left empty.
Let me know if I can provide any additional information- thanks!