Yes, this particular site is in a subfolder.
There is no specific media source defined in the manager, and I do have the "base href=++site_url " code exactly as noted by Everett in the document head for all pages.
At the moment, only the image paths produced by BookmarkThis are broken and that's because these paths include the preceding /. Removing the / in firebug pops the images right up.
Images inserted via manager image browser and hard coded images are fine, although I can't use the /.
site_url placeholder works as expected, no preceding / needed
i.e.
<link rel="stylesheet" href="[[++site_url]]assets/templates/siteTemplate/style.css">