Thumbnails goes to greybox

I have wordpress setup for small organization on my ubuntu 10.04 box not much to it really, but I have a really annoying issue that I can’t seem to figure out.
When anyone puts a picture into a post or a page, when the site is loaded up, the thumbnail comes up right away then it immediately switches to a grey box with scrolling grey bars. If I click on the grey box, the picture comes right up as it should. No matter what I have tried, the thumbnails go away and are replaced by this dumb grey box.
I have disabled all plugins, themes, changed size, tried nextgen gallery.

Easiest way might be to look at it. It should be the top post on my site called “test”
https://www.shankscob.com

Any Help would be great
thanks,