This one is really doing my head in. I've searched for quite some time for hints on how to resolve this, but unsure where to go to other than put a post up about HTTP errors with the new media library manager under 3.5.
When trying to upload an image (small in size), using either the normal uploader or the brwoser uploader, I get a HTTP Error (on the browser one, I get a 503 error). **Note: This is on a clean install of WP3.5 with no plugins, etc installed - so the possibility of a corrupting plugin is not the case here. THe resultant of this is that the image looks like it is there (a thumbnail seems to be generated when looking through the library), but it has a image size of 0x0.
I have done further testing and found that if I have an image over 110px wide, it cause the issue. Lower than 110px wide and it works.
Now, this leads me to believe it is an issue with my host and quite possibly a resource allocation issue. However I have setup the PHP.INI for this site with quite high allowances of memory, etc and still get the issue no matter what combination I use.
I did see a reference to version issues with imagemajick (as WP3.5 is now using it instead of GD). Checking with a php info, I found that the hosts version was (slightly) older than the current version. Possible issue there?
I currently have my hosters looking into the issue to see what they might think the problem is, but wanted to go to the WP community as well, as HTTP Errors with the media library seems to have been an on and off issue for quite some time.
Also note - not an issue under 3.4.2.