This was frustrating me to the point of bringin out my inner bear growl. Thank you so much for this. It's not a complete solution for me in my case, but it helped tremendously.
My layers would only expand if I set the thumbnails to small which do not include a thumbnail image, but adjusting like you were saying I tried playing around with the layer options settings and turned off "objects", and then it worked.
Even though it would be very useful to have that, I can make due with at least having most of the thumnail images showing while still allowing me to expand my layers. Thank you!