I am having similar problems to some others who have posted, but mine is a little different.
I uploaded a couple of images, which created thumbnails. They show up in the browse and can transfer to the editor. When I publish and look at the blog, the thumbnail doesn't show up, but the title of the image does. It's a link and when I click on it, a 500 error occurs.
Heres the url: http://www.mydognme.theuncommondog.com/
Please can you go to the site, click on the jpg link and see what's happening?
I already put the IGNORE in both statements as recommended in another post. Nothing changed. I've tried ImageManager plugin and it doesn't work any better, but seems for different reasons.
I've also tried ftping the images from my computer to the server and hard coding the <img> to show up. That doesn't work either.
I'm so frustrated with WordPress right now. I hear it's the best engine, but for as long as I've been using it, and for several different blogs, I've always had problems with what should be very simple things. arg.
I would really appreciate any help or suggestions with this image upload/display problem.