Oops, you're right.
It should be:
Find:
=====
$msg_icon = '';
$msg_icon2 = qq!<img src="$vars_config{NonCGIURL}/icons/icon1.gif" align="middle" border="0" alt="$vars_wordlets_img{alt_icon} 1" /> !;
Add below:
==========
$priv1="<?php echo Privates($x,"";
$priv2=""); ?>";
} else {
$priv1 = ''; $priv2 = '';
(updating txt file as we speak)
Note that msg_icon and msg_icon2 should be indeed one after the other, since about 10 lines above there is another instance of $msg_icon = '' and $msg_icon2 = ..., but they have another variable ($last_post_number) between them.