Hey CB!
First, let me say thanks for posting in the forums so others can learn from this experience.
There is a file in the main zip called gd_info.php. If you will put it on your server, outside of Joomla and run it, you should be able to see if your server supports all of the functions from the script. Just in case, here is the code from gd_info.php.
CODE
<?php
function describeGDdyn() {
echo "\n<ul><li>GD support: ";
if(function_exists("gd_info")){
echo "<font color=\"#00ff00\">yes</font>";
$info = gd_info();
$keys = array_keys($info);
for($i=0; $i<count($keys); $i++) {
if(is_bool($info[$keys[$i]])) echo "</li>\n<li>" . $keys[$i] .": " . yesNo($info[$keys[$i]]);
else echo "</li>\n<li>" . $keys[$i] .": " . $info[$keys[$i]];
}
} else { echo "<font color=\"#ff0000\">no</font>"; }
echo "</li></ul>";
}
function yesNo($bool){
if($bool) return "<font color=\"#00ff00\"> yes</font>";
else return "<font color=\"#ff0000\"> no</font>";
}
echo describeGDdyn();
?>
Can you tell me what settings you are using? IE, Text, Full Image, Half Image?
Any chance that something didn't install correctly? Maybe uninstall and reinstall?