I am having an issue with uploading images since I upgraded my wordpress sites to 3.5 last week.
Essentially, you upload an image in the usual way, the blue bar fills to 100% and then a red 'http error' appears at the top of the page. No further info on what the error might be.
If you then go to your media library, the image is essentially there, but if you click 'edit image', you get no image but an error message - Image data does not exist. Please re-upload the image.
I have spoken to the theme designer (it's the Volt magazine theme) and he says nothing on his theme should affect it -
I can assure you that the issue is not related to theme. We are not overriding any core functionality (like, media upload) inside the theme. It could be due to fastCGI, .htaccess setting, or folder permissions on the wp-content/uploads folder. For example, check this thread.
If that solution doesn’t work, kindly send me your FTP and WordPress login at xconsau[at]gmail[dot]com. I will look into it.
I haven't yet checked his suggestions, but I've done nothing this end apart from upgrade to 3.5 so with my albeit limited coding and database knowledge, I can't see how the error can be anything other than 3.5 related??
I've added a quick set of screengrabs for the process I explained above, you to see the error here http://www.sabmedia.co.uk/upload-media-problem.pdf