Of course the file exists. Looks in your vbulletin includes directory
The only difference I did to the command line was to add in the profile statement to strip exif from the resized image which should allow it to be smaller than the iriginal
I see no issue with gd2 at all here
original image in gd2 test shows 105.79 KB
resized image in gd2 test shows 65.50 KB
Now using Imagemagick
original Image with new Mogrify command shows 87.4 KB
resized image with new Mogrify command shows 62.83 KB
Before the resized image was like double the original file using mogrify
EDIT BY THE WAY for Zachs info.
YOUR CAN NOT WATERMARK A GIF IMAGE