I removed the blog link in the theme.php file and updated the .zip attached to original post.
If you don't want to re-download the .zip, go into theme.php and remove these lines (should be lines 94-96):
<!-- BEGIN blog home -->
<li><a href="http://shaneandpamela.com/wp/index.php" title="Go to the Blog home page" target="_blank">{HOME_ICO}Blog Home Page</a></li>
<!-- END blog home -->
Not sure why the header image does not work for you. I had to code the template.html file like this to get the image to load on my site:
<div id="header">
<div id="masthead">
<div id="branding" role="banner">
<span><div id="site-title">
<b>{GAL_NAME}</b>
</div></span>
<div id="site-description">{GAL_DESCRIPTION}</div>
<!-- header image to be size 940px by 198px -->
<img alt="photo frame" src="themes/twentyten/images/headers/header.jpg" width="940px" height="198px" border="0" />
<!-- END header image -->
</div><!-- #branding -->
<div id="access" role="navigation">
<div class="menu-header">
{SYS_MENU}
{SUB_MENU}
{ADMIN_MENU}
</div>
</div><!-- #access -->
<div id="access" role="navigation"></div>
</div><!-- #masthead -->
</div><!-- #header -->
You could try changing the src to "images/headers/header.jpg" in your template.html and see what that gives you. I had to trial and error it to get it to load. I originally had the img src hard coded directly to the http:// location of my image, but didn't like that. I've said it before, and I'll say it again. I'm no coder. I'm just a guy who likes playing around with websites. Maybe one of the admins can tell us both what the correct way to code in the image would be.