I see a lot of people mention this issue with AOKP. You have three options.
1. Try clearing the data in your Gallery app. Go to settings > apps > all > Gallery > click clear data. Reboot and see if this fixes the issue.
2. Ditch your Gallery app and download QuickPic (link) from the play store. It's a superior picture app. Better cropping and much better at setting wallpapers.
3. Try a dirty flash (make sure you have a Nandroid backup before you start this). Boot into recovery > wipe cache only > re-flash build 38 > re-flash gapps > reboot and see if this fixes the issue.
I'd like to use the QuickPic app posted but I enter the picture app from the small thumbnail in the corner of the camera. Is there anyway to change the app that opens when you click on that thumbnail?