Hey guys, thank you for your prompt reply. I will post more data as I collect it. I will also post in bug tracker for you ;-)
For now, here is what I have done to the stock gallery
--Installed latest ZP
--Installed zpGallerific theme
--Modified the custom.css file only
--Modified some of the theme images.
--Switched some of the colorbox images in the zp-core folders
That's all I can remember. I have tested by totally deleting the cache folders, regenerating the caches from admin, purging the cache from admin etc. It only happens in some galleries, and even WITHIN a gallery, some images are grayscale and some are not
I can give you guys FTP access to my site if you wish to peruse any of the files, folders etc. Let me know off-line. manny (at) manny (dot) org
Cheers!