I have a similar problem that was partially resolved by applying your instructions since I too use GoDaddy. Actually, I have two problems.
1. On the "Choose Design" page, when I select Preview on any of the designs, the phrase "loading..." is displayed but it gets no further. The URL looks good, "http://southbayenterprise.com/powergallerytest/galleries/grid_fullsize/index.php?gallery=2&theme=light", but no gallery is displayed.
2. On the "Add to Site" page, the link that is shown in "Direct Link to Your Gallery", is invalid as it shows "http://southbayenterprise.comD:/Hosting/4491668/html/powergallerytest/galleries/grid_fullsize/index.php?gallery=2&theme=light". This may be an artifact from when I first generated the gallery, which was before I applied your instructions. I don't know how to get the wizard to regenerate it or if that is possible. Taking out "D:/Hosting/4491668/html" from the URL just gets me back to the "loading..." issue.
Any advice on how I can correct these problems would be greatly appreciated. Thanks in advance.