recent custom posts plugin - images not showing

On http://www.LocalList.It I have installed the recent custom posts widget on the right home sidebar. I have titled this 'Celebrate The Day' and hope to show just one post, changing each day.

I'm using the magazine theme.

I've worked around the 'no categories' problem by creating a new user, and logging on to create posts from just one author, so only these will show in the widget.

Everything okay so far.

However, the thumbnails are not showing.

I have inserted images into each post.
Also I have linked images to some posts via the media editor.

Neither way works.
The posts are showing with no images.

On the widget, I have 'show featured thumbnails if available' ticked.

Can anyone assist?