29 Jul 2008, 04:10
This is something related to folderdata.xml not being properly updated for that folder. The folderdata.xml stores information about the dimensions of the thumbnails in that folder, and is required by the swf gallery for layout. If it is unset or incorrect, it will affect thumbnails layout. In youe case, it seems like it thinks thumbnail sizes are 0, hence making the thumbnails positions only increase with the default margin.
Perhaps you have a link? Did you click "Clear cache" in admin? That would normally resurrect the folderdata correctly to include the thumbnails parameters. A reason why that may not work would be if somehow it was not able to write to the folderdata.xml, but then it 'should' provide an error message in the gallery.