cannot change header image with 2.7

I’ve really been struggling to change my header image. On my other older wp blog…all I have to do is upload a new image to themes/default/images and it updates. With this new one, I’m stumped.
If I remove kubrickheader.jpg, I get whitespace. If I upload an edited version, I get a grey rectangle-I had previously changed the grey to blue on the dashboard.
I’ve restarted, cleared my cache. I don’t know what’s up.

Also, according to the docs, I should be looking in header.php for this section…

#header {
background: url(“<?php bloginfo(‘stylesheet_directory’); ?>/images/wc_header.jpg”)
no-repeat bottom center; }
#headerimg {
margin: 7px 9px 0;
height: 192px;
width: 740px; }

…but there is nothing like that in there. I did find kubrickheader.jpg twice in header-img.php but changing them did not help.

What am I doing wrong??

thanks,,,