Fugured it out. Here’s the fix if someone else runs across this post.
In Settings > Featured Content Gallery configuration page, you want to change the option from using a category to using page or post IDs, then enter the post or page numbers, in the order you want those featured images/posts to appear. Then the rest of your posts will show up in the main area, and only the posts you specify in the featured posts will appear in your content gallery.
If you select by category, then the front page ONLY shows posts in that category, both in the content gallery AND in the blog area below.
I figured out that it’s something with the edegree theme. If I change the theme to the twentyten theme it comes up perfectly. I just don’t know what to look for in the theme to try and fix it.