Hey, hello!
I think Nextgen 2 broke the shadowbox. Legacy worked fine with shadowbox in my other site. I am working on one with all the latest installation, WP 3.8, nextgen 2+ and no, shadow is not working.
I also noticed that if you grab a copy of shadowbox.js and link that library in your head section, it would somehow work except the navigation button.
I am still trying to figure it out, I hate to downgrade now that might have to go dig the db tables to flush things out.