the image I tried it on was under the file size limit but over the pixel limit, it was a standard .jpg. Upload something within the limits and it works fine.
That should not be a problem when the option 'save original image' is checked. I'm also using unmodified gallery files (vB3.5 Gold Gallery v1.0.1) except for the inline playing of media files in functions_gallery.php.
Brain, if you like, you can use the usernames provided in the support ticket to access the server.