MiniK2 Thumbnails not displaying

The thumbnails in my MiniK2 gallery are showing up a small white blank boxes. The title and intro text display but not the image. When I click the item it does correctly bring me to the item view showing the image correctly though. When I look at the source for the image when viewing the gallery it reads as follows...
data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==
I have no idea what this is or how it gets this but I believe this is the culprit. An ideas of why this is happening?
I apologize but I am currently developing locally for a client and do not have a URL that I can provide but would be happy to try and provide any additional info required.

I'm not sure I understand what you are asking, the original image is a .jpg as I mentioned. I also tried it with a .png in case the .jpg was causing a problem but got the same result. I don't know where in my K2 Item to see if the embedded file is a .jpg or a base 64 image format.

I came up with a solution, it isn't elegant but it was the only way I could make it work. Maybe this will help in understanding what is happening. When I add the module a second time to my page, the first module has the problem I discussed above, but the second one shows up fine. So I added the module twice, and use CSS to hide the first one and it works. Again, probably not the best solution but it works.