Hi - Not sure if this will help - but I have been having the same problem, I have been up loading my images and not being able to view them just shows the red X. My problem was easye resolved once i sat and thought about it! lol.

I was naming the image files something like myimage £12.50.jpg once i took out the £12.50 and any spaces, the images are now uploading and showing fine. Just a thought for you - hope it helps!

Cheers
AngelusUK