We solved the issue via email, but I wanted to put the solution here in case anyone comes across this thread in the future. We found the actual error + info in /opt/kaltura/log/kaltura_prod.log and it was indeed bad permissions on a directory.
The thumbnails get placed in (after conversion): /opt/kaltura/web//content/entry/tempthumb/0/0/ I changed the tempthumb, 0, and 0 directories to be 755 with apache:kaltura ownership and the files inside the directory to be apache:kaltura with 664 permissions.
If that change alone doesn't fix it, be sure to check the permissions on /opt/kaltura/web//content/entry/data/0/0 as well.
Huge thanks to @jess for finding the solution!