I decided to change my album_pic.php and album_picm.php files which has worked but it now means I'm using something effectively out of date.. I wish I knew what change between 048 and 052 caused these conditions
New album files are using a new images class to manage pictures, so now it's possible to have thumbnails even of PNGs and GIFs. This class is requiring an higher level of memory, so if you are experiencing problems you should try to raise your memory limit to 8 or 12 MB.
1.4.0 will be out soon, and I hope to have found a way to reduce the memory needed.