I'm running the latest version of WP and Hypershot on a multi-site install. When I create an album, the page just 404's. My best guess is something to do with the .htaccess modifications for a multi-site. There was a earlier post with someone saying they had the same issue that was resolved, but they never posted how they solved the problem.
Comments
This theme wasn't tested with multi-site so I have no clue what is the solution. However your guess might be right. You can first test on default permalinks if it works. There can also be problem with cache of "permalinks routes".
With regards.