[suzeeq]

You're knitting the thumb inside out, though you're just seeing the purl side of the knit sts, it's not garter stitch. When you picked up the sts you did it on the far side of the hole and you're continuing to knit with the needle tips away from you. Rip out the sts and pick up on the side of the thumbhole closest to you, as if you were taking a drink from a cup.