I did the next shirt (for less time) and it still did it.
I wonder if something is wrong with the paper I just got from ebay...
I'm doing the last one of this image - go for broke, right? - with my last sheet of paper from Hobby Lobby. If it is the right color, then I'll know it's the paper and have to demand a refund from the seller. (or something!)
updated - it IS the paper - the TransferMagic paper came out just fine.
I called the eBay vendor and he said he would replace all 25 sheets - I'm a little leary, but I'll give it one more chance...