No images visible / thumbnails not generated

same issue.
Solution:
Enable Chaos tools first, then Media, Media Gallery last
Steps:
1.Fresh install D7.7, since media cannot be uninstalled properly
2.Copy modules to yoursite\sites\all\modules:
Chaos tools, 7.x-1.0-rc1,
Media, 7.x-1.0-beta5,
Media Gallery, 7.x-1.0-beta6
Multiple forms,7.x-1.0-beta2

3.Enable 'Chaos tools' and other modules in 'Chaos tools Suite', save.
Following directory will be generated automatically:
yoursite\sites\default\files\styles
4.Enable following modules, save
File Entity (bundled with Media)
Media
Multiple forms
5.Enable 'Media Gallery' and other modules, save
6.Add content, Gallery, e.g.,
Title: g1,
save
7.Add media (image) to g1, one by one
8.Repeat step 6 and 7

Note: Following directories will be generated after step 6 and 7:
yoursite\sites\default\files\styles\media_gallery_thumbnail, etc.

Well, I'm experience the same issue and maybe can give more informations.
@Grammer
I followed your instructions several times but with "clean urls" enabled in drupal 7.9, the thumbnails didn't get generated in "yoursite\sites\default\files\styles\media_gallery_thumbnail". The images are uploaded without any problems in full (original) resolution and the strange thing is, that the thumbnails appears after disabling and re-enabling "clean urls". What should I do?

I am having the exact same problem as onny.

Thumbnails don't work when created WITH clean urls.
Thumbnails work when created WITHOUT clean urls.
Thumbnails created with clean urls work when clean urls are disabled and enabled again.

Did you fix this?

Thanks

Marked #1367226: Broken Thumbnails - No Thumbnails Created? as duplicate.

Maybe another module is breaking the thumbnail.
Can you try disabling oder modules, or list here all the modules you use?

My enabled modules are as follows:
Menu Per Role
Front Page
Block Cache Alter
Chaos tools
Field Permissions
File Field Sources
Mail System
Mass Contact
Mime Mail
Mime Mail CSS Compressor
File entity
Media
Media Gallery
Plupload integration module
Auto Assign Role
Disable breadcrumbs
Email Confirm
Entity API
Exclude node title
Libraries
LoginToboggan
Menu Firstchild
Multiple forms
Nodeaccess
Profile2
Quicktabs
Quicktabs Styles
Realname registration
Fuzzy Search
CKEditor
elFinder
elFinder File Field Source
Views
Views Export XLS
Views RSS
Views Slideshow
Views UI
Webform

Thanks!

I'm not able to reproduce the issue using the listed modules.

There are the same issues in the drupal-core image-system, maybe that helps:
#1109312: Image derivatives (image cache files such as thumbnails or custom styles) are not created when clean URLs are enabled
#1169116: image upload failed to generate thumbnail
#1000398: Thumbnails are not generated on LigHTTP

check if your files folder is writable by the webserver.

If you're using ubuntu...
chown -R www-data:www-data [your_files_directory]

I guess this issue has been solved seeing no answer for month. Please set back to active, if that is not the case.

I found my problem (finally!): nothing was checked on /admin/structure/file-types/manage/image/file-display

Doooh!