Index: gravatar.admin.inc
===================================================================
--- gravatar.admin.inc	(revision 465)
+++ gravatar.admin.inc	(working copy)
@@ -119,8 +119,8 @@
   switch ($option) {
   // system default image
   case 1:
-  $image = variable_get('user_picture_default', '');
-  break;
+    $image = variable_get('user_picture_default', '');
+    break;
   // module default image
   case 2:
     $image = drupal_get_path('module', 'gravatar') . '/avatar.png';
Index: gravatar.module
===================================================================
--- gravatar.module	(revision 465)
+++ gravatar.module	(working copy)
@@ -93,8 +93,7 @@
       } else if (!empty($account->picture) && file_exists($account->picture)) {
         $picture = file_create_url($account->picture);
       }
-      else if (variable_get('user_picture_default', '')) {
-        $picture = variable_get('user_picture_default', '');
+      else if (variable_get('user_picture_default', '')) {        $picture = variable_get('user_picture_default', '');
       }
     
     // gravatar is not enabled : old behavior from user.module
@@ -218,7 +217,8 @@
     switch (variable_get('gravatar_imagedefault', 0)) {
       // drupal default picture
       case 1:
-        $path = variable_get('user_picture_default', '');
+        global $base_url;
+        $path = $base_url .'/'. variable_get('user_picture_default', '');
         $gravatar .= '?d='. urlencode($path);
         break;
       // gravatar module default picture