I experienced this after upgrading to 3.0 RC1. When I click on the add image button on the add/edit post page, nothing happens. I can't seem to add any images to any new posts. I also do not see pictures in my post body even if I select Visual. It appears to be in HTML regardless of which tab I select. The tool bars in the edit post area also no longer contain any graphics and several are missing.
I have also notices my Featured Images has stopped working.
I am running the Suffusion 3.5.0 theme. My Website.
I have reloaded the WordPress files for RC1 and even tried to downgrade to Beta2 with no results. The featured images in Suffusion relies on Jquery Cycle and I reinstalled that plugin, also with no resolve. I checked my other blog dashboards to see if this only impacted one blog and it effects all my blogs. Any help or direction is greatly appreciated.