The only thing that springs to mind is png support not being enabled
In you Zencart Admin section
Click on "Version"
and find the gd section
and it should say something like this
GD Support enabled
GD Version bundled (2.0.34 compatible)
FreeType Support enabled
FreeType Linkage with freetype
FreeType Version 2.2.1
GIF Read Support enabled
GIF Create Support enabled
JPG Support enabled
PNG Support enabled
WBMP Support enabled
XPM Support enabled
XBM Support enabled
If the line in red isn't there, then that'll be your problem
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