Hmmm… can you try temporarily disabling all other plugins apart from GP Premium and GenerateBlocks. Then try adding the background image. If that works then there is a plugin conflict. You can then re-enable each plugin to see which one is conflicting.
We have fixed that in GenerateBlocks 1.2.
Its currently in alpha version – soon to be released.
You can test it if you want – the download is available here: