OK this is happening quite often now - about 50% of the time. The images have the first 1/4 showing up with the rest as grey.
Here is a sample
darwinsanoy.com/drop/cbimageerror.jpg
It is happening to jpgs and I have CB set to use NetPBM (version 9.24 is autodetected). CB says it has autodetected GB 1.6.2 or higher - but image uploads fail when I switch to it.
D.