Did you check the permissions settings on your images folder? And the images/large folder?

Are you using the exact same .png images that were working before?
Yep, yep and yep.

Absolutely *everything* is the same. It even works fine - just the large images have no watermark anymore (and yes, they are set to have them).

EDIT: I still have access to the bmz_cache folder on the old server - do you think it would help to copy it and move it to the new server?