OK, the problem is due to some issues with Terraserver that have been
going on for about a week or so. For some reason the server refuses to
serve certain tiles sometimes. We built in a mechanism to keep trying,
but that code wasn't tested with the KMZ exporter. It is trying, and
waiting, but it sometimes never gets that tile.
I have a fix that makes it so it doesn't just hang and take forever trying
to download. But the resulting KMZ ends up with a few (small number) of
holes in it (white fuzzy tiles).
If you're interested in this version I can hook you up with it.
Unfortunately it seems the missing tiles never show up, no matter how many
times the software tries them.
Interestingly they are only in the east -- I have tried some exports out
west (AZ, CA, etc) and they download and export just fine.
Anyway, they have corrected a number of the server issues and other forms
of missing tiles recently, so it is likely that it won't be long until the
server is back running 100%.
Sorry for the inconvenience and thanks a lot for reporting the problem and
your patience helping me figure out what's up.