Yes, I've been replicating something very similar!
I upgraded to WP 3.3 18 hours ago then I got started trying to upload images but it would only upload them if they were approx 1-2MB. Anything over 4MB would not upload and came up with the error message:
Fatal error: Out of memory (allocated 68681728) (tried to allocate 12672 bytes) in /home/xxxxxx/public_html/wp-includes/media.php on line 258, or similar.
Tried to use their new browser uploader and also alternatively upload them via a slideshow plugin I've just installed and neither made any difference.
Long story short after many options tried, and doing what Hostgator advised (directly uploading images to varies content files via their Control Panel) all still to no avail and same error message within WP when you go to where you installed them. CP uploaded them properly (although it took a lot of time) but when I went to where they were in WP the image just hadn't loaded up, (despite being located on that folder in CP), and the error message was still evident.
Hostgator has advised this is a programming error and we need to ask WP for a fix, as they've tried to help many with similar problems but still to no avail. (...and yes they put php.ini at 128MB on my account).
Does anyone know how to revert back to 3.2.1, and if it solved the problem.
(Is it me or don't you just hate upgrading when the damn thing isn't fully working perfectly?!! I actually trusted WP to not do that to us as well! Duh!).