There is a bug in WordPress image uploader for GIF image files.
When GIF images are uploaded to the web server using WordPress image uploader, the following error appears when the file is opened using PHP imagecreatefromgif() function (typically used by TimThumb image resizing script):
[26-Dec-2011 14:10:31] PHP Warning: imagecreatefromgif() [function.imagecreatefromgif]: '/wp-content/uploads/image.gif' is not a valid GIF file in /wp-content/themes/my-theme/scripts/thumb.php on line 295
[26-Dec-2011 14:10:31] PHP Warning: Cannot modify header information - headers already sent by (output started at /wp-content/themes/my-theme/scripts/thumb.php:295) in /wp-content/themes/my-theme/scripts/thumb.php on line 713
The error is not seen if the image is uploaded directly via FTP or cPanel File Manager.
It looks like the GIF file headers are tampered or corrupted by WordPress image uploader.