denis111 on page 18 of this thread actually helped me fix my Gallery issue and i think this should be added to OP.
Edit: Found the post
Gallery 'Set as Wallpaper' Fix
I tried all of the steps listed in OP to fix the Gallery issue, including fixing perms over ten times. Updated my SU binary without a problem but still no luck. Gallery FC whenever trying to "Set as" ... "Wallpaper". But the person (im sorry i just dont remember) suggested
Turning off GPU Rendering in: Settings - Develop Option - Force GPU Rendering
I turned this off, went to gallery and set as worked! I just wanted to confirm as i saw no one had said anything but it worked and im stoked!
Anyone else with gallery issue try this?
Bug Permission MessageApp Contact Picture Bug
After doing so many fix permissions to try and fix the Gallery bug, I noticed that when I opened my Messaging app (stock) my contact picture were all gone. However, when opening my Contacts app, all the pictures were fine. Since this has happened before, I looked at an old fix I had saved on my phone for when my Vibrant would do this and noticed that the pictures are PNGs and no longer JPGs. I modded the script a little bit and it worked just as before.
I am using 4EXT Recovery Touch 1.0.0.3 RC1 and it seems that it, unfortunately, sets the incorrect file permissions for the contact pictures stored in the stock messaging apps data folder. All we need to do is chmod the files to 664. Follow these steps to do so
Fix: Contact pictures in Messaging app
You will need: Terminal Emulator from the Market + root access)
Code:
Open: Terminal Emulator
1. Type: su
2. Type: cd/data/data/com.android.providers.contacts/files
3. Type: chmod 664 *.png
4. Type: exit
All done, you should be able to see your contact pictures in your messaging app as before.