After applying that file, it does appear to be importing now into the correct categories.
Observations/Questions:
1) Are the thumbnails in the blocks suppose to be that small (50% of original thumbnail)? The are currently displaying as 75x53 for a 150x113 thumbnail.
2) There is no text attached to block thumbnails.
3) Category image thumbs superimposed on dbtgallery.php background also appear like they could be much larger and still fit.
4) Appears to be a permission issue. When logged in as admin all images appear. If I also have it selected that "Unregistered / Not logged in" can view gallery, and view page when not logged in - not all thumbnail images appear.
5) All images still seem to load individually - one after the other. Page load times are much higher than experienced with similar data sized pages. Another gallery mod loading the same size data with nearly identical number of images and actually more requests is loading in less than 1/3 the time.