LCD's experience damage without screensavers as well, no? Zones that display the same items for too long get them 'burned in'. I'm not much of a hero at those things, though 
Depends on the quality of the screen. Most newer screens have very little burn, whilst a lot of older screens can burn easily. The best thing to do is have a screen saver that's all one colour (so either power save mode or a single colour full-screen image) set to come on after a short amount of time, that way your screen shouldn't have time to burn.
As for the original question, I have no idea. It could be failing to load the pictures, but then, I don't know why it wouldn't. Perhaps it's a scaled up problem of the same thing that causes thumbnails not to show properly when you look at all the files in a folder of images. As for a solution: no idea.
