Please post a link to the page on your site that contains the problematic code so we can check it out.
Sounds like a corrupt/legacy format image file. Possibly decent enough to be viewed in an image editor/viewer locally, but not for the browser, or damaged in transit (while uploading).
Depending upon your upload method, it could be an issue to do with permissions on the file and/or directory(ies) containing it. Most modern methods for uploading files deal with setting permissions automatically though.
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