Ya, as you posted i had updated the database to reflect a 'no' instead of NULL - understand, this site was using the original creation with perl back in the day, and has seen every upgrade since then... I imagine that something got messed up along that path at some point.
The watermarks are 50% transparent, so that repeating wasn't a worry for me. Updating all the photos to no, instead of null, and re-running worked.