Some of the usual questions apply:

• Are you sure the source file is where you think it is?
  I see several dies in what look like appropriate places (given my lack of knowledge of the specific modules you're using)
• Have you run this under debug?
  Potentially tedious, but often helpful
• a) Are you sure your problem is in the code you posted?
  b) How do you know?
  It's very hard to help if a) is not true; it's easier to feel confident that one is not wasting time, if the answer to b) is known.

Yes the source is where its supposed to be. The problem is creating several pngs at once. If i change the script to this:

sub parseBlastOutput{
    use Bio::Graphics;
    use Bio::SearchIO;
    use Bio::SeqFeature::Generic;
     
    my $searchio = Bio::SearchIO->new( -file   => 'CAZyOutputM7.xml',
                                       -format => 'blastxml' ) or die 
+'parse failed';
     
    my $result = $searchio->next_result() or die "no result";
    #while (my $result = $searchio->next_result) {
    
        my $panel = Bio::Graphics::Panel->new( -length    => $result->
+query_length,
                                               -width     => 800,
                                               -pad_left  => 10,
                                               -pad_right => 10 );
        
        my $full_length = Bio::SeqFeature::Generic->new( -start       
+ => 1,
                                                         -end         
+ => $result->query_length,
                                                         -display_name
+ => $result->query_name );
        $panel->add_track( $full_length,
                           -glyph   => 'arrow',
                           -tick    => 2,
                           -fgcolor => 'black',
                           -double  => 1,
                           -label   => 1 );
         
        my $track = $panel->add_track( -glyph       => 'graded_segment
+s',
                                       -label       => 1,
                                       -connector   => 'dashed',
                                       -bgcolor     => 'blue',
                                       -font2color  => 'red',
                                       -sort_order  => 'high_score',
                                       -description => sub { my $featu
+re = shift;
                                                             return un
+less $feature->has_tag('description');
                                                             my ($desc
+ription) = $feature->each_tag_value('description');
                                                             my $score
+ = $feature->score;
                                                             "$descrip
+tion, score=$score"; } );
        
        while (my $hit = $result->next_hit) {

            my $hitname = $hit->name;
            my $feature = Bio::SeqFeature::Generic->new( -score       
+ => $hit->raw_score,
                                                         -display_name
+ => $hit->name,
                                                         -tag         
+ => {    description => $hit->description } );
            while (my $hsp = $hit->next_hsp) {
                $feature->add_sub_SeqFeature($hsp,'EXPAND');
            }
        
            $track->add_feature($feature);
            
            
        }
        
        open my $blast, '>', 'sumting.png' or die "Failed to create su
+mting.png\n";
        print $blast $panel->png;
        close $blast or die "Failed to close $blast\n";

    #}
}
[download]

Then the script works just fine, however it only generates 1 png of the first hit in the blastoutput file

You say the original script does nothing. I suppose this means no file is generated at all. Which would mean the line wth "open my $blast..." is never executed. Otherwise there would at least be an empty file even if the png generation failed

You can make sure of this if you just insert a line 'print "was here\n"; in that last while loop and execute the script

Now you have 3 while loops inside each other. With the same method (inserting print statements) you can find out which is the one that never gets executed. Lets assume it is really the innermost loop that never gets executed. Put the following lines just before the start of the loop:

use Data::Dumper;
print Dumper(\$hit, $hit->next_hsp);
[download]

Execute and check what you get and whether it makes sense. Compare with the data from the other script where you got one picture out (after you added a similar Dumper line). If you find the discrepancy, check where it came from. You'll find the bug in no time

Sry, my bad, i should have specified some more. The first script does create a png file but it is empty. I will try to follow your instructions.