Your problem is that the drawing events aren't being processed because
you are busy making thumbnails, what you want to do is include a

while gtk.events_pending():
  gtk.main_iteration(False)

in your thumbnail loop. Check out the link below for more info.
http://live.gnome.org/PyGTK/FAQ/SignalHandling#head-614693e5763ca2b3f422ec197e482070ea4f9800

John
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