Blog Post Images Show to Admins but not Members/Visitors?!

Hello all;

Odd issue we're encountering over at
http://www.mymiddleearth.com

Blog posts on our MAIN site (We run multisite and buddypress as well) are not displaying images to registered members or unregistered visitors.

As a super admin, however, I can view the images just perfectly.

Here is a URL affected:
http://mymiddleearth.com/2012/07/02/featured-website-my-hobbit-hole-2/

This obviously appears to be SOME sort of permissions issue... But we cannot think of anything that we've done to create such a bizarre error recently, aside from updating to WP 3.4.1 (which HAS been giving myself and certain other users NUMEROUS Internal Server 500 errors doing certain things)

Anyone with ideas of what could be causing this?