I have been playing with wordpress multisite for several months and I was unable to figure out the issue of images not showing up in my posts.
I have read dozens of posts here and other sites about possible fixes without success. Most of the posts suggest that it is .htaccess problem, but my post show up correctly in "nice" URL, but I always get broken icon instead of an image inside posts.
I know that the images get uploaded correctly because I see them inside .../blogs.dir/... folder, but they never show up inside posts.
I have tried several different suggested variations of .htaccess without success, played with httpd.conf and checked file and folder permissions, without any success (even if they were all set to 777).
So I decided to test to see if it is my server issue or wordpress issue.
To test, I have installed Drupal. Right after installation, I did a test post, which included images, and SUCCESS, images show up inside post without any issues.
So at this point, it is a wordpress issue which I am unable to figure out.
If someone is able to figure out how to get the multisite wordpress to work on the server distro I am using, please let me know.
But at this point, I have no choice but to switch to Drupal.
(Which I am not too happy about because it will take some learning curve and I am already familiar with wordpress)
Linux distro I am using is SME Server, which can be found here: http://www.contribs.org
I am running their version 8b6