Hmm, well, MaLa can be pretty quirky at times. Sometimes you just need to poke at things to get them to work. Here's a few things to try:
First off, make sure all your snaps are held in a MaLa sub folder. e.g. C:\mala\images\snaps
The png file format can be quirky, too. I've had png files that display fine in Windows preview and Paint, but are screwed up when loaded into PhotoShop. Try converting a couple of images to another format, just to see if they display.
In Mala config (GUI->Options->Picture and Video), change the picture quality to "fast,low". Also try checking/unchecking the 'keep aspect ratio" box.
Try another layout to see if snaps show OK. If they do, you know MaLa has some problem with your layout. Post it here if you can, so we can test it.
See if you can find a codec pack online to install. Videos weren't working for me until I did this, despite them playing fine in Windows.