Robert, have you tried using an independent ftp client to upload the pictures? Or at least in order to take a look into your server to see what is where? There was some glitch a year ago or so with one of the CC progs (don't remember which) uploading the images OUTSIDE the public_html folder (or at some servers called the www folder).

Apart from that I can't quite relate to your problem as I always use a standalone ftp client for uploading.

And remember that when uploading images, the mode has to be binary or auto. I think that goes automatically, but better check...

Just out of curiousity Robert with whom are you hosted with, maybe we can get you the exact location of where you should upload your folders and such.