Just reporting a few things back...

i) Possible bug:
I had deleted the uploads folder a while back just to keep things as clean and secure as possible and as it turns out IM doesn't like this. Even-though I specified a folder _other than the uploads folder_ & IM acknowledged said folder and stated the rights were correct IM would not re-upload until I created a images/uploads/ folder. FYI I'm still using an alternate folder for temp. but now that the uploads/ folder exists I no longer get any errors and the image is re-uploaded.

ii) The suggested method of changing the Maximum Large Image Width/Height in the config to match the small image sizes and re-uploading in the hopes IM will add the image as LRG as well doesn't work. I don't get any errors but IM still shows it as "missing".

Also, on a somewhat unrelated note, I'd like to suggest the ability to rename file extensions. That would be awesome. From my perspective this would be nice because many files were uploaded as .jpeg instead of .jpg. In trying to maintain consistency throughout my site, I've been diligently renaming these. But it's somewhat painful to do. If IM could do this it'd be great!