I'm posting this because Emsi shut down the last few forums that this was being discussed in and Ben gave me a fix that says my theme is outdated but as previously stated, I checked with my theme created Tofurious and he said the problem was NOT on his end.
I changed my theme to the basic WP theme and no pics
I removed my plug ins and No pics
I checked with my theme creater, he stated not on their end
I checked with hostgator not their issue
I reuploaded my WP no pics
I'd have to say the issue is with WP, since I can't do anything more to make my images come back.
And actually if there are more then a few of us, which there are, I'd say something has to do with that update, before that.. everything was fine.
Now my images upload at 0x0 pixels and show as grey boxes..