If I remove the PNG thumbnails (with rounded corners) and replace them with JPEG rounded corners then the path thumb/{$fileName} works perfectly

But obviously rounded corner Jpeg's are not satisfactory

So this issue is not with Paths, this proves the paths are ok - but for some reason it does not see my PNG thumbnails as being related to the main Jpeg images...

MUST be missing something here - you are using PNG and JPEG in your demo

replacing the round cornered PNG thumbs with round cornered JPEG thumbs works ok - so this is not a path issue. My thumbs path is working fine - but it will not read PNG files from there with the same names as my main Jpegs

It happens because {$fileName} predefined variable contains file name with extension. We'll improve the module and add {$baseFileName} variable which will contain file name without extension. It helps to specify path to thumbnails in the following format: thumb/{$baseFileName}.png

PS: We'll provide update within several hours.

Regards,
ARI Soft

Download and upgrade extension please. New version provides ability to use {$baseFileName} predefined variable which contains original image file name without extension.

Regards,
ARI Soft

DOne that - no difference

Used "thumb/{$baseFileName}" as the path - still getting square images instead of the rounded PNGs in that folder

I assume you DID mean download the Carousel extension? not the Sexy Lightbox extension?