I contacted my blog network administrator. His exact words:
They're full of shit. I've not installed any widgets. Something in their java script hijacked the images on our front pages. So, take it to them.
Oh yea, who's running their customer service desk? That person is an idiot.
This after they flat-out called me a liar on one of my blogs:
http://www.offsitedatabackup.com/blog/index.php/2010/11/picapp-picks-up-your-pix/#comment-109
I have confirmed that although they claim it never did this unless you installed the widget, it did indeed do this last night. It doesn't seem to do it now, which is great; I don't have to throw out a hundred or so images. But to lie about it seems bizarre.