HTTP Error Media Errors

Hi! I am hoping someone could help me with these issues, I did search around but most of the threads were from 3 years ago and it didn’t help my issue.

These issues suddenly popped up randomly. It was working fine couple of days ago.

First Issue:
Uploading an image through the “Add an Image” button on the edit a post page brings up a “HTTP Error.” in red.
Screenshot: https://dl.dropbox.com/u/9179733/wperror1.jpg
The image still gets uploaded. Uploading this through the Add New Media page doesn’t bring up the error. Anyone ever experienced this before?

Second Issue:
When trying to insert an image into the post, clicking the “Insert into post” button directed me to a preview of the post.
Screenshot: https://dl.dropbox.com/u/9179733/wperror2.jpg
Weird right?

I’ve disabled all my plugins and nothing changes

This is my .htaccess file:

# BEGIN WordPress
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ - [L]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /index.php [L]
</IfModule>

# END WordPress

I am totally lost and don’t know what else I should do. This is not a server issue as I have other wordpress websites on the server and they don’t show the same glitches.

I appreciate your help!!

Michael.