style.css is being loaded twice in action.php, once in load_template() and once in load_css(). The former is correct, because it makes use of css_loadfile() which does the proper URL fixing etc. The problem is that then it's overridden in the second inclusion, so things don't work.
Am I correct in this? I've removed the $html .= $template['css']; line in my install and everything's working correctly. I'll send a pull request...
$html .= $template['css'];
Don't include template styles twice. #17
Moving this to #18, which I accidentally created. ;-p