Check with your hosts that your server is running the latest version of GD Library.
First of all, thank you for answering none of my question in such an epic technical support fashion. (Repeat that in your best Louis C. Clark voice..)
so.. Why? What is GD Library and why would that be effecting the color? I have about 50 3.4 and 3.5 installs on this server (GoDaddy Ultimate Grid Hosting).. and I have no problems.. let alone, no access to upgrade anything like GD Library on a shared environment.. Is this some new 3.6 requirement?
I think not.. I can upload images fine in the body of the site.. it’s just the header image that changes the color.. can someone help me on this please?
More details… I replaced circles.png and circles-thumbnail.png in the images folder with my versions and selected them through the header select menu and it worked as expected.
However, If I choose a new image to upload, the crop dialog box is correct, but upon submit, when you preview it, the image is overlaid with like a 5% transparent orange or yellow color… seems like a bug.
Just tested that here: http://wpchildthemes.info/2013flexheader/ – black and white image with no adverse effect on the color.
A link to the site would be helpful – plus, have you considered a plugin conflict?
GD Library is the PHP module that is used to actually process images. An older version may cause dome final image problems.