It goes beyond just pictures when I go to themes none of the pictures are loading there as well. I just get This Image failed to load. The thumbnials appear for a second then disappear as soon as I click on in the batch manager.

Looks like when I comment out the following lines in the /etc/nginx/sites-available/piwigo all the thumbnails and pictures load.

location ~* \.(gif|png|jpe?g)$ {
        if ($check_referal = "invalid+not_piwigo") {
            return                403;
        }
        try_files                 $uri $uri/ @rewrite;

I have no idea what this means.

You followed someone else's configuration of Nginx/Piwigo and the portion you mentioned is not part of Piwigo. Maybe the commented (original?) source sheds some light.