Hello, I had a similar problem:
– images smaller than approximately 640 x 480 would upload properly but I would get the “http error” message on image crunch with anything larger.
I tried different variations of the .htaccess hack, but finally found Jon R. Wilson’s to work! (I didn’t even have to put the .htaccess file in higher-up directories, only in the root wordpress directory.
My own setup is a PHP Version 5.2.13 server hosted by 1and1.com.
Hope this helps someone else! Thanks Mr. Wilson.
