Difficulties with watermarks in Gallery 1

The following information is required to get an answer:
Get this information from the PHP diagnostic (in the configuration wizard).
Gallery URL (optional but very useful):http://www.artbelowzero.net/gallery2/albums.php
Gallery version:1.5.7
Apache version:2.0.46
PHP version (don't just say PHP 4, please):4.3.2
Graphics Toolkit:netpbm
Operating system: Linux
Web browser/version (if applicable): firefox 2.0.0.4

My error is that I'm trying to watermark images within the gallery. I loaded in the netpbm_gallery-1.4-pl2-linux-intel netpbm binaries. I turned on the debug mode and these are the errors it's spitting back to me.

Debug messages:

jpegtopnm: WRITING PPM FILE
pnmcomp: Error reading magic number from Netpbm image stream. Most often, this means your input file is empty.
pnmtojpeg: Error reading magic number from Netpbm image stream. Most often, this means your input file is empty.
jpegtopnm: Error writing single byte sample to file

Status: 1 (expected 0)

If someone could please help me I'd really appreciate it. After several hours of debugging I'm about to pull out my hair .

Thanks in advance!