Yes the classicBlog template does indeed load fancybox which could potentially cause issues.

If you have two versions of a jQuery module on the same page - you can get all sorts of issues.

To test out if the conflict is being cause by the blog version you can fairly easily remove the offending file.
But you will need ftp of direct file access to do so.

All of the templates for the blog engine can be found under
\DesktopModules\Blog\Templates\

And more specifically the classicBlog template can be found under
\DesktopModules\Blog\Templates\classicBlog\

The template engine is designed to automatically inject any javascript modules it finds in the /js/ subfolder of the template.
\DesktopModules\Blog\Templates\classicBlog\js\

If for the moment you were to remove the jquery.fancybox-1.3.4.pack.js file from this folder
 ... the blog engine will no longer automatically inject the file.

This would ensure that the version of fancybox injected by the blog module will no longer be active.
However - it may still cause some issues with the blog module itself - it may not be compatible with the other fancybox - but thats something you would need to experiment with.

Westa