Error with Image

[NZ_Kiwis]

All i get is a black image, what is wrong?

<?php 
$filename = "http://www.mysite.com/photos/one/name.jpg";

define("DS_OFFSET", 5);
define("DS_STEPS", 10);
define("DS_SPREAD", 1);

list($o_width, $o_height) = getimagesize($filename);
$nwidth  = $o_width + DS_OFFSET;
$nheight = $o_height + DS_OFFSET;

$image = imagecreatetruecolor($nwidth, $nheight);

$background = array("r" => 255, "g" => 255, "b" => 255);
$background = array("r" => 255, "g" => 255, "b" => 255);

$current_color = $background;

for ($i = 0; $i <= DS_STEPS; $i++) {
  $color[$i] = imagecolorallocate($image, round($current_color["r"]), round($current_color["g"]), round($current_color["b"]));

  $current_color["r"] -= $step_offset["r"];
  $current_color["g"] -= $step_offset["g"];
  $current_color["b"] -= $step_offset["b"];
}

imagefilledrectangle($image, 0,0, $width, $height, $colors[0]);

for ($i = 0; $i < count($colors); $i++) {
  imagefilledrectangle($image, DS_OFFSET, DS_OFFSET, $width, $height, $colors[$i]);
  $width -= DS_SPREAD;
  $height -= DS_SPREAD;
}



$off_site = $filename;  

$fp = fopen ($off_site, 'rb') or die('Unable to open file '.$off_site.' for reading');  

$buf = ''; 
while (!feof ($fp))  

{  

$buf .= fgets($fp, 4096);  

}  

header('Content-Type: image/jpeg'); 
$data = $buf; 

$src = imagecreatefromstring ($data); 
$width = imagesx($src); 
$height = imagesy($src); 
$aspect_ratio = $height/$width; 
$aspect_ratio2 = $width/$height;  

if ($size == "M") {
if ($height > $width) {
$new_h = 640; 
$new_w = 480; 
} else { 
$new_w = 640; 
$new_h = 480; 
} 
} elseif ($size == "L") {
if ($height > $width) {
$new_h = 960; 
$new_w = 720; 
} else { 
$new_w = 960; 
$new_h = 720; 
} 
} elseif ($size == "S") {
if ($height > $width) {
$new_h = 240; 
$new_w = 180; 
} else { 
$new_w = 180; 
$new_h = 240; 
} 
}


$img = imagecreatetruecolor ($new_w,$new_h);  

imagecopymerge($image, $img, 0,0, 0,0, $o_width, $o_height, 100);

//imagecopyresampled ($img,$src,0,0,0,0,$new_w,$new_h,$width,$height);  

$img2 = imagerotate($img, $degrees, 0);
imagejpeg($img2, '', 90);  

imagedestroy($img2); 
?>