ryanc, that might be the case.
Try to create a snippet named ’phpinfo’ without the quote and insert this
Put that snippet uncached [!phpinfo!] on one of your page. Save it, and try to browse to the page, you should see the php information on it.
Search for the wrod ’GD’. Do they have GD library installed on your server, if not it won’t generate a thubmnail for you, and you need to install GD lib on your server.