My LASTN_USERPIC is set to:

<IMG ALIGN=MIDDLE HSPACE=2 VSPACE=2 SRC="%%src%%" WIDTH=%%width%% HEIGHT=%%height%% BORDER="0">

My FRIENDS_FRIENDPIC is:

<BR><IMG SRC="%%src%%" WIDTH=%%width%% HEIGHT=%%height%% BORDER=0 VSPACE=2>

and my FRIENDS_EVENT_PROTECTED is:

<TABLE BORDER="0" CELLPADDING="2" CELLSPACING="0">
<TR><TD VALIGN=TOP ALIGN="MIDDLE" BGCOLOR="%%bgcolor%%" WIDTH=100>
<FONT FACE="Verdana,Arial,Helvetica" SIZE="2" COLOR=%%fgcolor%%>
<A HREF="%%cons:siteroot%%/users/%%user%%/"><FONT COLOR=%%fgcolor%%><B>%%user%%</B></FONT></A><BR><A HREF="%%cons:siteroot%%/users/%%user%%/">%%altposter%%%%friendpic%%</A>
</FONT>
</TD><TD VALIGN=TOP>
<FONT FACE="Verdana,Arial,Helvetica" SIZE="2">
<B>%%datetime%%</B>%%subject%%  <IMG ALIGN=ABSMIDDLE SRC="%%cons:img%%/icon_protected.gif" WIDTH=14 HEIGHT=15 VSPACE=2 HSPACE=2 ALT="Protected">
</FONT>
<BR>
<FONT FACE="Verdana,Arial,Helvetica" SIZE="2">
%%event%%
<BR>
%%currents%%
</FONT>
</TD></TR>
</TABLE>
<p align="right">%%talklinks%% </p>

so I see nothing in there to cause it offhand. (Note: I know the code is ugly, it came that way from the system style and I've never bothered to fix it all up.)