Turning on Hotlink Prevention will not show any images at all regardless of if you are an administrator. It will only show text links to the images and will not show in the lytebox either. Turning this option off, will enable you to see the images again. As experienced by Mic in this thread. Clicky

I really don't think there is a bug...

I stumbled across the same issue just a few minutes ago.

The "trick" (well actually it is no trick at all) is that you need to enter correct values (=at least the domain on which the gallery runs) in the "Allowed domains for hotlink" field if you turn hotlink prevention on.

If you leave it at the default value (flying-bits.org), only requests originating from flying-bits.org will get a valid image returned.

At least it worked here without problems after I set the correct domain.

regards
Thomas

Like already mentioned, it works.
The only problem is the bad description:

[svn-file]http://code.bantux.org/repositories/diff/phpbb-gallery/trunk/root/language/en/mods/gallery_acp.php?rev=932&rev_to=931[/svn-file]