never hurts to try...i went to the site and see the lightbox works (without watermark) and the small image has the watermark.
did you ever activate for the med image when seen by hovering small image to have the watermark.
I notice that your small image and the hover of it are the same size...maybe that is why the watermark does not want to cooperate with the large image...have you tried increasing the size of your medium image?
sorry I realize that the last part is for the ih2 forum so will also add it there.
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