[AUCTeX] preview-latex generates .png files, but does not place them properly in buffer?

[Dan Maftei]

I hesitate to send this to the bug list, as it might be a problem on my end.

When generating previews, I get a small, empty white box with a thin border around it. I looked inside the .prv folder and the .png files are indeed being created. 

MWE:

\documentclass{article}
\begin{document}
$3+4$
\end{document}

Running emacs 24.1.1 (manually compiled) under X with ghostscript 9.05, texlive-2011, on OS X 10.7. I've tried both AUCTeX 11.86 (with the patch described here https://bugzilla.redhat.com/show_bug.cgi?id=646632 which fixes options that are passed to newer versions of gs so that .png files can be generated at all) and the latest development version, which includes the patch.

Aquamacs, however, correctly generates previews. It looks like Aquamacs uses AUCTeX 11.86 with the patch described above. Perhaps this is a problem with OS X's X11?  However, emacs under X does have .png support (e.g. M-x thumbs works), so it looks like a problem with preview-latex.

Thoughts?