Oh man. I have been dealing with these symptoms for the last 4 days...
I manually installed a 3.1.1 package sometime back in October (or so) on Bluehost. The "cloud" service. Seemed fine back then (using a customized BCU theme). I returned to it this week, only to find very slow, intermittent performance, and no image upload. All jpgs and pngs's attempted to upload returned a broken image link in preview and course. I am also running 2.8.3 for another client on Bluehost VPS which still seems totally fine. Been up since early 2014.
As panicking and frustration will provide, I began check and setting every iteration of admin settings, caches of all varieties, database structure, table integrity, permissions, CPanel settings, theme, config.php, etc, etc... I am now running 3.2+ as of 36 hours or so. Latest of fourth or fifth various manual installs. Pretty much default.
Performance seems better to load site, but not totally sure on that. Sometimes fine, sometimes slower. Usually, first load in AM is terrible. Thinking Bluehost maybe.
Right away, no images load. Same issues. HOWEVER - by chance, as I kept trying to add images with different name conventions, sizes, and file type, suddenly, I got an image taken via DSLR to upload, appear in preview, and appear perfectly in course! I did this several times from the folder with the first image, and thinking something magically repaired, I moved on to the logos, etc in another folder. Those images would not load.
Here's what I found: The images that loaded properly all had their file extension in UPPERCASE LETTERS. The files with .jpg and .png do not work, but .JPG and .PNG files DO!
Seems strange. Please advise! THANK YOU