Oddly enough I only started to get this same error message on my local host after I had changed code to the location of the uploaded images..but that was a fairly straightforward process that wouldnt have effected imagecache...I even deleted the the webassist imagecache php folder and reapplied the server behaviour, deleted all the _notes folders and the cache folder on the localhost...but still get this issue..the only other part of my system that is different is either the latest databridge revision and the WAMP software (I used to use WampServer now Im using XAMPP). I havent had time to investigate this issue but i am interested to find out any details of why its happening :)
Chris