I have had very good luck with SIGE gallery watermark and Lyteshow, until this week. I could not find any similar problem reported.
Now, when I attempt to add a new article with a gallery tag the thumbnail shows (I limit thumbs to 1) but the image slideshow does not work. Older articles with their gallery tag continue to work correctly even on the same page on the site as the new articles. The watermark folder and images are created correctly for new articles, however none of the slideshows (Slimbox, Litebox, Liteshow, Shadowbox) will display the new watermarked galleries. The slideshow sits with a spinning circle and never shows the images.
If I turn off watermark it works OK.
I have uninstalled and reinstalled the plug-in, with the same result.