NextGen Gallery WordPress upgrade issue – “Not a valid template” messsage

Just upgraded NextGen Gallery in my WordPress site from NextGen Version 1.6.1 to 2.0.59

after upgrade the galleries are working fine but a customization I used to get four thumbnails to show on my home page is not working.

I created a custom home page template that would show each post title and four related gallery thumbnails from appropriate gallery.

However, after the upgrade instead of the four thumbnails I see “[Not a valid template]”

The custom home page code is:

<ul>
    <?php
    global $post;
    $myposts = get_posts('numberposts=100&order=ASC&orderby=title&category=3');
    foreach($myposts as $post) :
        setup_postdata($post);
    ?>
        <li><a href="<?php the_permalink(); ?>"><?php the_title(); ?> </a> <?php ngg_excerpt(); ?></li>
    <?php endforeach; ?>
</ul>

I had added a custom function ngg_excerpt to the theme functions. That function is still present after the upgrade and has the following code:

function ngg_excerpt()
{
    //get the post content
    $content_data = get_the_content();
    //extract shortcode from content
    preg_match("/[ngg([^}]*)]/", $content_data ,$matches);
    $results = $matches[1];
    //if shortcode exists in content
    if (!empty($results))
    {
        //extract gallery id from shortcode
        $gallery_id = preg_replace("/[^0-9]/", '', $matches[1]);
        //$template = "gallery-compact.php";
        //make sure that NextGen is loaded
        if (function_exists(nggShowGallery))
        {
            //output gallery, showing only 4 images
            echo nggShowGallery( $gallery_id, "compact", 4 );
        }
    }
}

The nggShowGallery appears to be included in the newer version of NextGen Gallery. Does anyone have any ideas about what might be missing or different in the version 2.0.59 that would cause this “[Not a valid template]” message?