Another Pic Uploading Question

Alright so I try to upload an image through the back office of WordPress.

I am in edit post mode, click to add an image and the flash uploader pops up – I pick the image from my computer and it “crunches” but then the image it shows me is not an image but only the filename. If I select insert into post it inserts nothing but an outline of the image with what looks like a broken link watermark in the top left corner. But no image. Also tried with the simple uploader – same result.

I can still upload via ftp – but I built this site for someone else and they aren’t that savvy.

Address: http://www.mindovermath.ca

I did move it recently from mindovermath.ca/blog to the root domain BUT we successfully added pics since then (using the flash uploader)

Could this be a WP issue?