I am having the same problem, with the same error messages. My webserver is not logging any errors other than the “Empty RSS feed from Picasa; unable to build minibrowser form.” error from picasa-album-uploader.
I have checked for the suhosin plugin or indeed anything that would imply the variable names have been truncated – nothing. I don’t know how to re-create the picasa RSS feed to see if the problem is indeed at Picasa or the server.
This is my first attempt to install this plugin so I don’t know if previous versions would have worked with my setup.