I'd understand a minimum width of 1 or even 2 but 16, its a bit strange.
Actually it makes sense for an 8-bit image. Swizzling requires a minimum width of 16
bytes, so the minimum width in pixels is
(16*8 =) 128 / bpp.
the reason I'm not using a tile sheet in this particular occasion is because 4 of these are created when you smash a block, i update everything single one and each block moves differently.
You can use "tile" sheets for your sprites, too; just draw a differently-sized segment of the texture at a location unrestricted by grid coordinates. Take a look at
pgeFont.c: it stores the font's characters, often of different widths, in one texture, and can print them at any location on the screen.
EDIT: I tried drawing both images in PGE 0.02, SVN PGE, and my modified version. 0.02 exhibited the problem as you described it, except that disabling swizzle seemed to have no effect. Neither the SVN version nor my version exhibited this problem, so I assume whatever caused was fixed between 0.02 and 0.03 (which makes it hard to pin down

), but isn't related to the changes I made.