Just removed the entire next-gen plugin directory and downloaded a new copy of it.. still same problem.
You can see the problem here:
http://www.syntaxwarriors.com/index.php?callback=image&pid=28&width=320&height=240&mode=
This is the url that nextgen generates to the thumbnail.
There is about 50Kb of data returned with a PNG header, but there seems to be an error in the data so the image cant be displayed
