Hmmm...my previous posts will attest to the fact that I'm no expert, but that may be a saving grace here...I've made most of the mistakes before other people will

Here are the things that stand out, to me, from your post (as things you might want to look at):
1) I don't think the main config.php settings impact the thumbnailer selection with geekary. It's all about the settings in the table prefix_geekary (gl_geekary by default), which gets set up during install.
2) I have had the most luck with ImageMagick. After you installed ImageMagick, did you re-configure/re-install geekary?
3) When entering the "path to mogrify", it's not the full path. (e.g., use '/usr/local/bin/' instead of '/usr/local/bin/mogrify/')
If you've got mad SQL skills or a tool like phpmyadmin, check out the table described above and see if that fixes stuff.
Hope I've helped more than I've confused,
-David