Was there an update on the theme? If so, check that the functions.php file in the theme includes this code add_theme_support( 'post-thumbnails' );.
I'm using WordPress 3.5 with a customized theme and List Category Posts 0.27 on this page, and as you can see the thumbnails are displaying. I'm using this code:
[catlist numberposts=10 excerpt_size=10 excerpt=yes thumbnail=yes thumbnail_class="alignright" class="lcp_catlist_clear"]
Maybe test with a different theme to see if the issue is on the theme, or there's actually a bug in the plugin which is not displaying the thumbnails.