Are you using a standard install?  Have you modified anything with Market or WPMU?

Can you provide an example page of one messing up?

Yes, I see.

On this page:

http://templates.photo-blogger…..lash-game/

I see that the smaller thumbnails are showing up, and those are hosted on a different server than your main image is.

That would lead me to suspect that maybe your photo-bloggers hosting account isn't setup quite the same.

I see that when I try to access the image directly using:

I get an internal server error.  That tells me that I either don't have permissions to view the file, or the URL path is incorrect.

Maybe that'll help.

On another note, there was a report yesterday of someone having some issues with the thumbnails, and it was because their host had just upgraded to PHP 5.3. 

Maybe that's the case for you.  In the download center under "Bug Fixes", there's a new zipped file called "phpThumb update".  Unzip that file and put the "phpthumb" folder into your Market theme directory, overwriting the files there currently.  I'm not sure that this will do it, but it might help.