There's an issue with the way the new plugin works such that it only executes the first time the plugin is called.  K2 items "hack" the plugin hook multiple times per item to parse their galleries and video plugins so this means that SIG won't actually run on the item text.

A diff patch is attached but it's a simple fix to do by hand. Change the two "require_once(" in plugins/content/jw_simpleImageGallery.php" to "include(" (lines 32 & 37)

Gratefully,
Harikaram