Blueiris: I'm sure you found it - good job. That's saves me some time.
First of all, everything I said above about producing the problem on my computer is moot for this particular thread. Please ignore it. (I will use the information for my own uses, but it's unrelated to sharpo's original problem.)
Second of all, Casper copied the code you mentioned from admin.php, not update.php.
So here's my guess. Let's start at the beginning. Coppermine apparently uses the thumb prefix everywhere, for all thumbs, including the system ones in the core images/ folder. (Something I'm going to take up with the devs.) So whenever you change the thumb prefix, it renames the images/thumbs to use the new thumb prefix. It also renames the thumbs in the current theme/images as well, but only the current theme. If you happen to change the thumb prefix and then change to a new theme that has its own images/thumbs, the thumbs won't have the correct prefix. (I haven't reproduced this supposed error yet.) The core themes actually don't have any custom thumbs, so this issue only occurs for other themes that have custom thumbs. I only mention this for reference; it's not related I don't think to this issue, but it might be if Casper wanted to make sure the theme's custom thumbs are correct. As I mention below, I have no idea besides this one why he bothers to rename the thumbs.
Casper's hack also renames the thumbs in the core/images and the theme/images, but it does this when you configure the Paypal shop, every time. I'm not sure why. The problem is that he uses the $_POST['thumb_pfx'] which is not defined by his form; it *is* defined by the config panel form (in admin.php), so when you change the thumb prefix, it will use the new setting you set (in $_POST['thumb_pfx']) to rename the thumbs as I said.
So, $_POST['thumb_pfx'] is blank and all the core thumbs are renamed to have no thumb prefix. This is the problem that sharpo found. It's a bug in the Paypal shop hack, but it does highlight an issue I think exists in the core code about renaming the thumbs. I will discuss this information with the devs.
In the end, I think this thread belongs in the Mods board. I'll modify the title to reflect the Paypal shop bug. I don't think it's instructive to merge it with the Paypal shop thread, but I will post on that thread with a link to this thread.
But first:
@sharpo: Could you try to configure your Paypal shop and hit submit? You don't have to change anything, just go to the config page, then submit. My guess is that it will rename your core images/thumbs and you'll have the same blank img src that started this thread. If so, please let me know, so I can close this issue as "Solved". Of course, after you do this, just rename the thumbs again.