Image Handler 4 (for v1.5.x) Support Thread

[shartlesville]

My website is here: http://bestsewingdeals.com

I "successfully" installed IH4 but when I follow step 10 Navigate to Admin > Configuration > Images, set "IH resize images" to "yes". all the images disappear. If it is set to no, the images show as they normally would. When set to yes, if I right click and try to open the image in a new tab it brings up a server error (in Spanish, ) and this is the link in the address bar:
http://bestsewingdeals.com/zen-cart/...ge.150x150.jpg



I am having the same issue in the admin section with the images not showing and right click, open image in a new tab causing the server error (also in Spanish).

bmz_cache and images folders are both set to 777. I have not made any changes to the configuration (yet) as it says it should work "out of the box" without changes.

This happened yesterday when I installed it but I was too tired to try to deal with it so I uninstalled it and spent most of today reading the entire thread. I re-installed it and watched to make sure there were no errors or files not installed, etc. I received all "green" messages upon install.

Any ideas? Am I missing something obvious?

Thank you for any assistance in advance!

Blessings,
Krisann
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Currently installed:
Zen 1.5
Additional Product Images v 2_0c REMOVED - a conflict between this and IH4 caused the right sideboxes to disappear!
Admin Display Product Catalog Thumb
Admin_Login_As_Customer_v3.0_For_ZCv150
Admin Notes Advanced
Admin Change PW Display
Backup MySQL plugin v5
Backup Zencart v1
Confirm Email Address 1.3a
Contact Us- add subject
contest system 1
Define Pages- shopping cart
Easy Attributes 1.3.91.5.0
Email for 404 v122
Fast Easy Checkout 1.5.0
Mailchimp 3.0
newsletter_discount_3.0
Piccadilly_Posh (template)
Recover Cart Sales
Rewards Points Full Suite 2.1.b
Save Sideboxes Layout
Button Construction
Dynamic Filter
IH4

Server OS: Linux 2.6.30.1-3.AM_64
Database: MySQL 5.0.51a-24-log
HTTP Server: Apache/2.2.11
PHP Version: 5.3.9 (Zend: 2.3.0)
PHP Memory Limit: 64M
PHP Safe Mode: Off
PHP File Uploads: On

Zen Cart 1.5.0
Database Patch Level: 1.5.0
v1.5.0 [2012-08-13 12:56:00] (Version Update 1.3.9->1.5.0)
v1.3.9h [2011-10-12 22:06:48] (Fresh Installation)