You are using version v1.7.9-200805132119 of phpThumb which I can see when I click your link.
I can also see a whole lot of errors... these errors will be screwing up the header of the image so you need to fix them.
Deprecated: Function eregi() is deprecated in /srv/www/downtherabbithole.co.uk/public_html/wp-content/themes/Elegant/phpThumb/phpthumb.class.php on line 980
Deprecated: Function ereg_replace() is deprecated in /srv/www/downtherabbithole.co.uk/public_html/wp-content/themes/Elegant/phpThumb/phpthumb.class.php on line 890
Deprecated: Function ereg_replace() is deprecated in /srv/www/downtherabbithole.co.uk/public_html/wp-content/themes/Elegant/phpThumb/phpthumb.functions.php on line 886
All of the errors seem to be to do with the deperecated ereg* functions... luckily these should all be easily fixed by upgrading your version of phpThumb to the latest version - v1.7.10 fixed this issue you are getting... v1.7.11 is available.
Alternatively if you cannot upgrade phpThumb you could supress the E_DEPRECATED errors in your php.ini... but that wouldn't be ideal.