Hi Henning,
Thanks for your inisight! We have our memory_limit set to 128M on this server. Do you have any other suggestions on what might make things work?
We can use alternative methods to showcase templates to our clients, though this is our preferred method if we can get it working. It seems like the Template Selector calls the new template in a way where Gantry templates respond differently to older RT templates / templates from other developers.
Essentially I'm looking to see whether it's something simple so that I can look at modifying Template Selector to handle the difference and / or throw the entire thing out the window if it's not worth the time / effort. 
With error reporting set to Maximum it shows:
Notice: Undefined property: stdClass::$id in /home/software-testing/joomla_v25/libraries/gantry/core/gantrytemplate.class.php on line 327 Notice: Undefined property: stdClass::$id in /home/software-testing/joomla_v25/libraries/gantry/core/gantrytemplate.class.php on line 357 Notice: Undefined index: in /home/software-testing/joomla_v25/libraries/gantry/core/gantrytemplate.class.php on line 520 Notice: Trying to get property of non-object in /home/software-testing/joomla_v25/libraries/gantry/core/gantrytemplate.class.php on line 358 Fatal error: Call to a member function get() on a non-object in /home/software-testing/joomla_v25/libraries/gantry/core/gantrytemplate.class.php on line 358
Cheers,
Joyce