Looks as if you should check for a header image to begin with and only process all that markup and stuff if you have one. You may have just edited this check out by mistake.
<?php
// Check to see if the header image has been removed
$header_image = get_header_image();
if ( $header_image ) :
?>
{...} ALL THE CODE YOU POSTED PUT IN BETWEEN THIS CHECK
<?php endif; // end check for removed header image ?>
