Rod,

Just as a test .. .does it work if the image is a .jpg instead of a .png?

ok, Rod

I took a look at the network trace on the MakeThumbnail.aspx call, and in the response header it appears you have the Snapsis PageBlaster component running. I think the problem is that PageBlaster thinks the response from an .aspx page is html, but in this case is a stream of the image bytes.  PageBlaster compresses the response for performance but in this case causes the image stream to be compressed and therefore the image is no longer valid

try turning off PageBlaster, or better yet, configure it to not compress the MakeThumbnail.aspx output

this forum post might help
http://www.snapsis.com/Support/tabid/...