I have been banging my head against the wall for days trying to figure out why I couldn't get images to insert into posts.
On uploading images via drag and drop, the upload and crunching bars would fill up, then be replaced with the message An error occurred in the upload. Please try again later.
If I closed out the loader, I could then go back and insert media, and the images would be visible.
The problem at this point was that when I hit "insert into post," nothing would happen.
I disabled all plugins.
I did the plugins.hold trick.
I tried twenty eleven, I tried twenty ten.
There were tons of JS warnings in my console (still are, but I just noticed I get most of the same jquery warnings even here on the forum), but eventually I stumbled across one that was different from the rest:
Timestamp: 1/22/2013 10:10:32 AM Error: junk after document element Source File: MYSITE/wp-admin/admin-ajax.php Line: 2, Column: 1 Source Code: Notice: ob_end_flush(): failed to delete buffer zlib output compression in MYSITE/wp-includes/functions.php on line 2690
I recognized this as the debug error, which I only see right before I log into WP or after I log out, on the main login screen.
I have this error on another WP 3.4 installation on this same server if I enable debug mode, and it doesn't break anything, and I don't worry about it.
However, it seems like the WP debug error that should probably get displayed on screen is somehow getting jumbled into the script. Maybe something isn't closing or the placement of the error message isn't quite right?
Anyway, I think this would qualify as a bug in 3.5, as a debugging message probably should be placed somewhere where it won't break the AJAX on the back end of a bone-stock installation.
Long Story Short:
I set wp_debug to false in wp-config, and not only are my image woes gone, another AJAX problem in the admin area is now rectified. See http://wordpress.org/support/topic/i-have-a-problem-with-regenerate-thumbnails for the details of that problem.