@aamorrison, haven’t asked you this before: have you set WordPress Popular Posts to generate all thumbnails for you or to use the ones you’ve picked?
If you set it to “Generate all thumbnails for me” WPP will attempt to find all images attached* to your post, and the use the first one to create a thumbnail from it using timthumb.php
(an external script I use with WPP to generate the images). However, if no images are found attached to your post’ content then WPP will use the default “No thumbnail” image (this will happen even if you have selected a featured image for it).
On the other hand, if you select “Use the thumbnails selected by me”, WPP should be able to retrieve the ones you have picked and use them instead (if any).
After this long explanation… in either case if my plugin didn’t find an image it’ll show the default picture (which can be changed, btw). You need to either specify one (if you picked “Use the thumbnails selected by me”) or attach an image to your post (“Generate all thumbnails for me”) so WPP can use them to create an image. Otherwise, it’ll display the default “No thumbnail” image.
Now I realize that this change I made on the last update makes things a bit more complicated than I expected… I believe I may have to re-think the way my plugin retrieves the images and make the whole process a bit more user-friendly… mmm…
* by attached image, I mean the ones you add to your posts using the “Add an image” feature on your Edit Post page.