Media uploads are failing at the point where ImageMagick is trying to crop the image.
in function crop, this line
$this->image->cropImage( $src_w, $src_h, $src_x, $src_y );
Causes an Http 500 Internal Server Error.
This happens with HostPapa, not with another host I am using. New Install of WordPress 3.5
At a loss. Hostpapa support does not deal with WordPress issues as it is "Third Party Software".