Multiple loops break with this bit of code, any ideas why?

Commenting out the .images div will make the loops function properly, but with this code, the second loop will not function correctly.

Specifically: the second (main) loop disregards “blog pages show at most”, and clicking a post link wont link to the specified post, but to all posts.

First loop

<?php $my_query = new WP_Query('showposts=8&offset=0'); ?>
    <?php while ($my_query->have_posts()) : $my_query->the_post(); ?>
    <div class="posts" onclick="location.href='<?php echo get_permalink() ?>';" style="cursor: pointer;" class="fader">

        <div class="texts2">
             <span><h3><?php the_title(); ?></h3></span>
	</div>

        <div class="images">
	    <?php $thumbnail = wp_get_attachment_image_src(get_post_thumbnail_id(), 'small'); if (has_post_thumbnail()) { echo '<img class="circles" src="'.get_bloginfo('template_url').'/timthumb.php?src='.$thumbnail[0].'&w=94&h=94&zc=1&q=100" alt="'.get_the_title().'" />';  }?>
	</div><!--images-->

    </div><!--posts-->
<?php endwhile; ?>

Second (main) loop

<div id="blogs">
	<?php rewind_posts();?>
	<?php if (have_posts()) : ?>
         <?php while (have_posts()) : the_post();?>
                <div class="post">
               	<h2><?php the_title(); ?></h2>
               	<div class="content"><?php the_content(); ?></div>
               </div><!--post-->
          <?php endwhile; ?>
</div><!--blogs-->

Does anyone have any idea why the code within .images is breaking the next loop?
Am I forgetting to close something? I just need a few other pairs of eyes here! Thanks!

ps. the loop in question here, is using the script timthumb to pull the featured images from the posts, I am using it to make a visual wall of post images.