A while back, I was creating a post and the second attached image would not render on my blog.
I resorted to inserting the image in manually with width/height set to make it the equivalent sized thumbnail of the attached image that was working....and inserted a link to call lightbox, to make that work the same as well. And, then I didn't think anything of it...until I
found that my site using photoblog was broken completely as well.
So, I delved into getfile.php....eventually found that when it get's to $Plugins->trigger_event('BeforeThumbCreate'....) and just exits somewhere.
Found that the only plugin registered was watermark, so disabling that got things working again. Don't recall seeing what it did for the images where it did generate thumbnails...so I guess I can live without it for now.... ;D