images won’t work

I can’t get images to show in the blog, they all come up as broken.
I searched here and tried everything I could find, no luck.
The upload works fine, the code it generates looks ok.
I did chmod the wp-content folder to 777
no matter what I try with the image path, relative or absolute the images are still broken.
Oh, and none of the smilies seem to work either.
Any ideas?

SilverWulf