Under 'any suggestions' ... but first ... might be a good idea to provide some more info ...
Local host was on what platform?
Server is what platform and is it a shared host, a VPS, or what? And operating system does make a difference.
Moodle version is?
Is site using files for sessions or database? Why was manually removing the contents of moodledata/sessions a bad idea? Could be a permissions issue on moodledata/sessions/?
Is site running cron frequently enough?
Have you looked into the 'scheduled task' ... especially the task related to sessions.
Missing images ... ownerships permissons on moodledata/filedir are?
Have you looked into web service logs ... especially error logs? How about PHP error logs?
Have you turned on debug to see what else Moodle might be able to tell you?
'spirit of sharing', Ken