The image I tried to upload was a decent size..
I checked and the thumb's folder is 777, and there are no (zero) folders inside of it.
I also checked and the thumbnail threshold is 100..
It is acting crazy.. I mean, the smaller picture did resize down..
On your upload, it didn't create the thumbnail. If I'm seeing the /data/thumbs at 777, what else could it possibly be? Any ideas??